Pacific Airlines Temporarily Halts Operations Amid Fleet Restructuring

Pacific Airlines, based in Ho Chi Minh City, has temporarily ceased flight operations and has begun returning its aircraft to lessors as part of a strategic restructuring effort aimed at addressing its financial difficulties and enhancing operational efficiency. The airline, grappling with lease commitments, paused flights and booking services on March 18, signaling a significant phase in its ongoing efforts to navigate through financial challenges.

A spokesperson for Pacific Airlines confirmed the airline’s current status, emphasizing the focus on fleet and route network restructuring to optimize its operations. Before suspending services, Pacific Airlines’ fleet comprised eight leased A320-200 aircraft, with a minimal number remaining active. The aircraft were leased from Aviation Capital Group, Wings Capital Partners, and CALC.

Reports indicate that the airline has arranged to return the leased aircraft in exchange for a debt write-down by the lessors, totaling approximately USD220 million. As part of its restructuring plan, Pacific Airlines aims to lease three aircraft from its parent company, Vietnam Airlines, enabling it to maintain its operating license during this transitional period.

Founded in 1991 initially as a cargo carrier, Pacific Airlines transitioned to passenger services later that decade. The airline underwent several significant changes over the years, including a rebranding to Jetstar Pacific following Qantas Group’s acquisition of a stake and a subsequent takeover by Vietnam Airlines, which led to a return to the Pacific Airlines brand.

Despite efforts to expand its operations, Pacific Airlines has faced persistent financial losses, with total revenues in 2022 amounting to VND3.49 trillion (USD140 million) against a pre-tax loss of VND2.1 trillion (USD84.5 million). The airline’s total accrued losses as of the end of 2022 stood at VND10.7 trillion (USD431.6 million).

In response to the current situation, the Civil Aviation Authority of Viet Nam (CAAV) has instructed Pacific Airlines to present a detailed restructuring plan and encouraged a swift resumption of operations. Additionally, the airline has been asked to manage passenger refunds efficiently and rebook affected travelers on Vietnam Airlines flights, which has pledged support through the provision of airport and ground service facilities.

Pacific Airlines has engaged with the CAAV, seeking guidance and support for its restructuring efforts and eventual return to operations, although a specific timeline for resumption has yet to be disclosed. This period marks a critical juncture for Pacific Airlines as it endeavors to realign its strategy and emerge from its financial predicament.