National flag carrier Vietnam Airlines signed a credit deal with three commercial banks on July 7. — Photo courtesy of Vietnam Airlines

National flag carrier Vietnam Airlines has signed a credit deal, worth VND4 trillion (US$173.7 million), with three commercial banks, to weather the financial impact of the COVID-19 pandemic.

Under the agreement, the Southeast Asia Commercial Joint Stock Bank (SeABank), the Vietnam Maritime Commercial Joint Stock Bank (MSB) and the Saigon-Hanoi Commercial Joint Stock Bank (SHB) are committed to providing the carrier with zero-interest loans refinanced by the State Bank of Vietnam.

Despite the recovery of the domestic aviation market, Vietnam Airlines said it has lost more than 60 per cent of revenue due to travel restrictions and border closures induced by COVID-19.

Last year, the airline posted a revenue of more than VND40.61 trillion, down 59 per cent from 2019.

The carrier operated around 96,500 flights during the year, a drop of more than 48 per cent compared to the previous year. It served 14.23 million passengers and handled nearly 195,000 tonnes of cargo, decreases of 51 per cent and 47 per cent, respectively.

Vietnam Airlines, which is 86.19 owned by the government, is taking necessary steps to issue VND8 trillion worth of ordinary shares to existing shareholders by the end of third quarter of this year. — VNS