Airlines once again have complained about the difficulties they have faced since the Covid-19 breakout and have asked for urgent help at a workshop on overcoming crisis and sustainable development held by the Vietnam Aviation Business Association (VABA) some days ago.

A representative of Vietnam Airlines said the pandemic has wiped out half of revenue of the carrier so far this year. It predicts a consolidated loss of VND14-15 trillion this year and cash flow deficit of VND15 trillion.

According to Ho Ngoc Yen Phuong, deputy CEO of Vietjet Air, before the pandemic, the carrier had a high annual growth rate of 30 percent. Because of the pandemic, the revenue has dropped by 70-75 percent. The airline incurred a loss of VND2.4 trillion in the first nine months of the year alone.

“Vietjet Air has haf to sell a lot of assets accumulated over many years of operation. We are lacking trillions of dong for business activities,” Phuong said.

As for Bamboo Airways, its deputy CEO Le Khac Hai said when the pandemic reached its peak, 80-90 percent of the fleet had to stop operation. Only one flight is operating every two days on backbone air routes.

Hai estimates that the loss incurred by Bamboo Airways is one-third to one-fourth of Vietnam Airlines.

The National Assembly approved a bailout for Vietnam Airlines worth VND12 trillion, including VND4 trillion worth of preferential loans disbursed through credit institutions.

Phuong from Vietjet said aviation enterprises will continue facing liquidity problems in the next 2-3 years, so they need preferential loans for 3-5 years.

She suggested appointing two powerful state-owned banks to join the program on providing preferential loans. The airlines would pay principal and interest within three years, from 2023 to 2025.

Phuong stressed that Vietjet has been making every effort to maintain jobs for 6,000 workers, including negotiating payment to pilots based on hours and slashing leaders’ salaries by 70-80 percent. However, the carrier has still incurred a big loss and needs the government’s support.

Bamboo Airways has also proposed that the National Assembly and government provide private airlines a financial support package like the one given to Vietnam Airlines. It wants to borrow money from commercial banks at the interest rate of 2-3 percent for 2-3 years.

Ngo Tri Long, a respected economist, estimates that the government would have to prop up VND1 trillion a year for the interest rate, while airlines would pay VND20 trillion a year in taxes and fees. Once airlines recover, they will make great contributions to the economy. 

Ngoc Ha

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