Pacific Airlines Halts Operations and Returns Fleet Amid Restructuring Plans

Vietnam’s Pacific Airlines has temporarily ceased its operations and has returned its fleet to lessors as part of a comprehensive restructuring plan aimed at addressing its financial challenges. The low-cost carrier, which has been unable to fulfill its leasing obligations, suspended its flights and booking services on March 18, signaling a significant shift in its operational strategy.

A representative from Pacific Airlines revealed that the airline is undergoing a critical phase of fleet and network restructuring to improve its operational efficiency. The suspension came as the airline struggled with financial commitments, prompting it to return its leased aircraft. According to ch-aviation fleets data, out of eight A320-200 aircraft leased, only one remained active at the time of service suspension. The aircraft were leased from Aviation Capital Group, Wings Capital Partners, and CALC, with the lessors reportedly agreeing to forgive approximately USD220 million in debts in exchange for the return of the planes.

To maintain its operating license during this transitional period, Pacific Airlines plans to lease three aircraft from Vietnam Airlines, its state-owned parent company, based at Hanoi Noi Bai International. This strategic move aims to facilitate the low-cost carrier’s restructuring efforts while keeping its operational framework intact.

Pacific Airlines, which transitioned from a cargo to a passenger carrier since its inception in 1991, has faced continuous financial difficulties. Despite rebranding efforts and ownership changes, including a period under the Qantas Group and a subsequent takeover by Vietnam Airlines, the airline reported significant losses. In 2022, it incurred a pre-tax loss of VND2.1 trillion (USD84.5 million) against revenues of VND3.49 trillion (USD140 million), contributing to its accumulated losses of VND10.7 trillion (USD431.6 million).

Following the operational pause, the Civil Aviation Authority of Vietnam (CAAV) has directed Pacific Airlines to present a detailed restructuring plan and expedite the resumption of its services. The authority also mandated the airline to relinquish any unused flight slots temporarily and ensure the prompt processing of passenger refunds. In response, Pacific Airlines committed to rebooking affected passengers on Vietnam Airlines flights and sought the CAAV’s guidance for a smooth restructuring and operational restart, though a specific timeline for resumption remains unclear.

Sources: AirGuide Business airguide.info, bing.com, ch-aviation.com