Vietnam Airlines plans to sell nine planes due to financial woes
Vietnam Airlines is planning to sell nine A321CEO planes to optimize its fleet and improve its cash flow, as the national flag carrier’s revenue has dropped sharply due to the Covid-19 pandemic.
Passengers get off a Vietnam Airlines plane
The selling of these planes, which were produced between 2007 and 2008, is also part of Vietnam Airlines’ plan to replace planes aged 12 years or more.
The selling will be discussed and approved at the airline’s shareholder meeting scheduled for August 10.
The airline cited the International Air Transport Association as saying it would take two to three years for the aviation sector to recover to the 2019 levels.
Therefore, Vietnam Airlines and Vietnam Airlines Group, including Pacific Airlines, would have 25 nonoperational planes in the second half of 2020 and six in 2021.
The airline expects its revenue to reach over VND40.5 trillion in 2020, equivalent to 40.5% of the 2019 revenue. In terms of profit, it would suffer a loss of more than VND15 trillion and hoped to serve 14.5 million passengers this year, down 36.8% year-on-year.
The revenue and profit of the airline dropped steeply in the first half of this year. Its loss was VND6.64 trillion between January and June.
The domestic aviation sector has gradually recovered but the international market remains gloomy as many countries still impose travel restrictions.
Vietnam Airlines had to cut costs and negotiate with foreign credit institutions to delay debt payments. It has also planned to borrow VND12 trillion from the Government.
As of May, the airline’s debts amounted to US$780 million. SGT
Ngoc Lan/Anh Quan
The COVID-19 pandemic has severely dragged down revenues of the Vietnam Airlines Corporation (Vietnam Airlines) and the Airports Corporation of Vietnam (ACV) in the second quarter of this year.
Never-before-seen activities in Vietnam’s aviation sphere are expected to come to EU businesses soon on the back of the landmark EU-Vietnam Free Trade Agreement.