Tran Dinh Thien, former director of the Vietnam Economics Institute, said the State needs to take responsibility for Vietnam Airlines as the owner. However, he said that the action aims to rescue the economy, not to rescue one enterprise.

Duong Tri Thanh, CEO of Vietnam Airlines

“Who to save and how to save are the issues that need thorough discussion,” Thien said.

“If considering aviation a business field that needs to be prioritized to save to protect the economy, the government would have to clarify the arguments for saving Vietnam Airlines and consider the role of Vietnam Airlines in the economy,” he added.

Prior to that, Vietnam Airlines, the national flag air carrier, reporting a 50 percent turnover reduction and weak cash flow, asked for a financial support package of VND12 trillion to overcome current difficulties.

“The words that can be used to describe the situation of the aviation sector are ‘paralysed’ and ‘frozen’.” said Duong Tri Thanh, CEO of Vietnam Airlines.

After closing all international air routes on March 23, Vietnam Airlines has not had revenue from international transport since April 1 and the number of foreign passengers in June dropped by 99.3 percent compared with the same period last year.

According to Thanh, Vietnam Airlines has been making a profit since 2010, but it foresees a loss of VND13 trillion this year because of the pandemic. 

After closing all international air routes on March 23, Vietnam Airlines has not had revenue from international transport since April 1 and the number of foreign passengers in June dropped by 99.3 percent compared with the same period last year.

As for the domestic market, though domestic travel demand increased again, the domestic passenger output 84 percent of that in June 2019 and the revenue in H1 was 46 percent of the same period last year.

Thanh said the impact of Covid-19 on Vietnam Airlines has been ‘terrible’. “The Vietnamese sky has not seen so few flights since 1975,” Thanh said, adding that the air carrier only had three flights a day in April.

An analyst said rescuing Vietnam Airlines is a must, because aviation is an important sector in the economy and it will save other business fields that interact with it.

“Other countries also have to choose one or two airlines to rescue,” he said.

However, many legal problems need to be resolved to rescue Vietnam Airlines.

Dinh Viet Tung, deputy general director of the State Capital Investment Corporation (SCIC) said, as a financial investor, SCIC will have to follow procedures, including due diligence, which will take 6-9 months to complete. Meanwhile, Vietnam Airlines needs urgent support. 

Chi Mai

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