Vietnam Airlines seeks $518mln support from government

The carrier is seeking an urgent VND12 trillion ($518 million) support from the government since pandemic continues to hit its revenues.

Though Vietnam has resumes domestic aviation market after the country successfully contained the virus, ban on international commercial flights is still in place.

Vietnam Airlines expects a loss of VND13 trillion ($561 million) in 2020, with revenues falling by half from last year to around VND50 trillion ($2.2 billion), CEO Duong Tri Thanh said, adding without liquidity support, Vietnam Airlines will face a liquidity shortage from the end of August.

The company which the government holds the controlling 86.19% stake is projected to lose VND50 trillion ($2.16 billion) in revenue this year due to the pandemic. It has suspended all international flights since April.

At the meeting, government economic advisors proposed options to help the airline include issuing more shares to existing shareholders or allowing investment by sovereign fund State Capital Investment Corporation.

The aviation sector is among the hardest hit by the pandemic. Airlines served 14.6 million passengers in the first six months, down 46 percent year-on-year, according to the General Statistics Office.

The International Air Transport Association estimates that Vietnamese aviation firms will lose about $4 billion in revenue.