Vietnam Airlines' planes at Noi Bai ariport. — VNA/VNS photo Huy Hung
At the Government's online conference with the business community on September 26, the national flag carrier Vietnam Airlines JSC (HVN) continued to propose a series of special incentives to the Government and the Prime Minister.
Accordingly, Vietnam Airlines proposed to allow the carrier to be considered as a special case to maintain listing on HoSE during the negative equity period.
The carrier also proposed to the Government a policy of developing the next package of support solutions for the company, along with its overall restructuring project.
At the same time, it suggested the Government allow the carrier to soon reopen international routes to countries considered safe from COVID-19.
Previously, in its announced consolidated financial statements, Vietnam Airlines reported a cumulative loss of VND17.7 trillion (US$778.4 million), exceeding its charter capital and marking negative equity of more than VND2.75 trillion for the first time.
Although its second quarter's net revenue still rose by 9 per cent to more than VND6.5 trillion, huge fixed expenses made Vietnam Airlines suffer a gross loss of nearly VND3.5 trillion, higher than the loss of nearly VND2.9 trillion in the same period last year.
In the first six months of the year, its net revenue reached nearly VND14 trillion, down 43.6 per cent year-on-year. The accumulated net loss in the first six months was more than VND8.4 trillion. In the same period last year, the loss was more than VND5.1 trillion.
Vietnam Airlines explained that the COVID-19 pandemic continues to seriously and directly affect the global aviation industry.
Its parent company’s total revenue and other incomes in the second quarter dropped by 26.5 per cent over the same period in 2020. Of which, the revenue from services decreased by 11.3 per cent, revenue from financial activities declined by 72.5 per cent.
Another reason leading to the fall in profit of the parent company is that profits of subsidiaries related to the provision of aviation services, such as Vaeco and Nasco, also decreased sharply.
According to the provisions of the Law on Securities, if an enterprise has a total accumulated loss exceeding the actual contributed charter capital in the most recent audited financial statement before the time of consideration, it will be subject to compulsory delisting. Therefore, if it is unable to increase charter capital soon, the HVN shares may be at risk of being forced to delist.
In the summary of recommendations sent to the Prime Minister, the Vietnam Aviation Business Association (VABA) proposed to the Government and the National Assembly to consider and allow other airlines to borrow at an interest rate of 0 per cent as they have done with Vietnam Airlines, with the package of VND4 trillion for a maximum loan over three years.
The aim is to ensure a fair business environment and help the carrier deal with liquidity. The specific loan amount is based on the needs of each firm, based on the size, market share, contribution to the budget in the past, and the ability to meet the budget needs.
The VABA also asked the Government to approve a loan package of VND25 trillion with preferential interest rates for airlines from November 2020 by the association.
The purpose is to help companies with regular expenses, procurement of materials and equipment, implementation of projects and programmes, maintenance and operation during the time when community immunity has not been reached.
The association also recommended socialising the investment in construction and exploitation of aviation infrastructure, attracting capital to invest in the construction, management and operation of airports, prioritising budget for construction projects, improving service quality and reducing service prices related to aviation infrastructure. — VNS