Vietnam Airlines’ CEO Duong Tri Thanh, at a seminar with the Prime Minister’s Economic Advisory Council held some days ago, said the national flag air carrier’s net loss has reached VND13 trillion, though the domestic air market has recovered.

Since April, Vietnam Airlines has not provided international commercial flights. In June, the domestic market began recovering with the number of passengers increasing to 84 percent of last year. However, the revenue remains very low.

“Domestic flights are mostly short distances with low airfares to stimulate tourism,” he explained.

Prior to that, Vietnam Airlines’ Tran Thanh Hien also affirmed that the air carrier is facing difficulties because of Covid-19, and that if it could not get the government’s support soon, it would run out of cash by August.

Vietnam Airlines needs VND12 trillion of capital to maintain its operation. Issuing shares to existing shareholders is one of the solutions suggested.

Vietnam Airlines needs VND12 trillion of capital to maintain its operation. Issuing shares to existing shareholders is one of the solutions suggested.

The State Capital Investment Corporation (SCIC) immediately expressed it willingness to make an investment in Vietnam Airlines and restructure it.

However, there are legal problems which may hinder the plan to issue shares.

Under the Securities Law, businesses can only issue shares to existing shareholders if they have made a profit in the last three consecutive years. Vietnam Airlines reported losses in Q1.

Vietnam Airlines still doesn’t have long-term business plan, so it is impossible to predict the future of an investment worth trillions of dong, if SCIC agrees to make an investment in the air carrier.

SCIC is a state-owned enterprise, so it has to observe the law on managing and using state capital to invest in enterprises.

The law stipulates that investments must be made on the principle of preserving and developing capital.

In current conditions, no one can be sure that the investment in Vietnam Airlines will be safe, because the time when the air carrier fully recovers is unclear.

Also under the Law 69, air transport, the major business field of Vietnam Airlines, is not included in the list of the business fields in which the State has to invest.

Ngo Tri Long, an economist, told VietnamFinance that if the State pours VND12 trillion into Vietnam Airlines, this would raise a question about discriminatory treatment between state-owned and privately run enterprises: the state accepts to rescue a state-owned enterprise, but doesn’t intend to do the same thing with private businesses.

However, Long agrees with other experts that the aviation sector is an important business field of the economy and needs support.

Kim Chi 

Vietnam Airlines resumes charter flights to China

National flag carrier Vietnam Airlines has operated the first charter flight to China’s Nanjing City after a five-month suspension owing to the Covid-19 pandemic.  

No new airlines is allowed until 2022

No new airlines will be allowed to open in Viet Nam until 2022 at the earliest, Deputy Prime Minister Trinh Dinh Dung has announced.