Vietnamese airlines seek loans to help them weather the pandemic | New
The suspension of international flights amid the coronavirus pandemic will cost Vietnamese airlines 15 trillion dinars ($ 649 million) in 2021, according to the country’s Vietnam Aviation Business Association.
The association made the request in a report filed with the country’s Ministry of Planning and Investment, according to a report published in the VnExpress briefing. This follows 18 trillion dinars of losses in 2020.
Low-cost airline VietJet Air has requested a 4.5 trillion dinar “credit package” for the period 2021-2023, according to the report, while Bamboo Airways has requested a long-term loan of 5000 billion dinars. .
This follows a 4 trillion dinar bailout from Vietnam Airlines.
In response to an email from FlightGlobal, Bamboo said these discussions were confidential.
“Submissions and ongoing discussions between a company and government authorities of this nature in Vietnam are considered confidential information in accordance with applicable regulations,” he said.
“Nevertheless, the fact that some private airlines in Vietnam, including Bamboo Airways, have managed to thrive in [what is dubbed the] “Worst year in aviation history” is a shining demonstration of their resilience and determination. These valuable characteristics need to be strongly taken into account when developing supportive government policies, in which financial resources come from a limited government budget and need to be used efficiently.
The airline has grown rapidly since its inception at the end of 2019. Cirium fleet data shows that it leases 27 planes from 10 different lessors. It also plans to conduct an IPO in the third quarter.
Vietjet did not respond to FlightGlobal’s request for comment on the potential loan.
According to a March 16 research report by local brokerage firm Bao Viet Securities, it fell to an operating loss of 2.4 trillion dinars in 2020, compared to operating profit of 3.8 trillion dinars in 2019. Income fell 64% year-on-year to 18.2 dinars. one thousand billion. Yet the incidental income helped him achieve a net after-tax profit of 70 billion dinars.
The Bao Viet report also highlighted the challenges facing Vietnamese airlines. Even though the country’s domestic market was largely open in 2020 given Hanoi’s aggressive response to Covid-19, the number of domestic passengers fell 61.3% to 34.8 million passengers, while the number of international passengers fell 78.9% to just three million.
“More intense domestic competition due to the shutdown of international routes has reduced airline ticket prices, affected trade margins in 2020, and this situation is expected to continue in 2021,” Bao Viet said.
“The oversupply in the domestic market affects the performance of most airlines, with different stages of impact. In our opinion, the influence on [Vietjet] will be less severe thanks to its know-how with a low-cost model, while [Vietnam Airlines], operating on a traditional model, will be strongly affected [by reduced fares]. “