VietJetAir, Bamboo Airways appeal for state aid

VietJetAir (VJ, Hanoi) has asked the government to encourage commercial banks to offer it soft loans of VND4 trillion dong (USD173 million), for which it would pay the principal and interest in 2023-2025, local media reported. Speaking at a seminar titled “Overcoming crisis, developing Vietnam’s aviation sustainably”, the carrier’s chief financial officer, Ngọc Yến Phương Hồ, revealed that the company had incurred substantial losses over the last nine months, forcing it to sell assets, slash wages by 50% to 70%, and pay minimum salaries of VND8-10 million (USD350-430) to many staff. Airlines in other countries, such as Thailand and China, have been offered financial support, she argued, and once Vietnam resumes international flights, they will be in a position to compete fiercely with local airlines. Vietnam’s carriers will continue to experience liquidity difficulties in the next two to three years, she added. Last month, the National Assembly of Vietnam approved a VND12 trillion (USD520 million) bailout for majority state-owned Vietnam Airlines (VN, Hanoi), including low-interest loans worth VND4 trillion. At the same aviation seminar, a representative of Bamboo Airways (QH, Hanoi) also urged the government to consider providing financial packages for private airlines similar to the one handed to the flag carrier. In addition, the carriers proposed extending the period in which take-off and landing fees have been halved until the end of 2021, plus cutting the country’s environmental protection tax for airlines by 70%. They also called for international flights to be allowed to resume to countries that have the pandemic under control. Separately, VietJetAir shareholder Sovico Aviation Holdings has registered to buy 33 million more shares in Vietjet Aviation Joint Stock Company in a deal to be concluded by December 11, the low-cost carrier announced in a statement on November 24. Sovico previously held a 6% stake, equivalent to 41.1 million shares. VietJetAir said that the move by Sovico, a Vietnamese finance, real estate, and energy giant, “suggests confidence in Vietjet’s recovery post-Covid-19” due to measures it has put in place “in response to the ups and downs of the aviation market.” Vietnamese airlines’ stock prices began to lift in November as investors predicted a rebound.