Can Vietnam’s flag carrier stay afloat?

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LONDON – An auditing firm has revealed that Vietnam’s flag carrier Vietnam Airlines, also a member of Skyteam, may not be able to continue operations as figures show worrying levels of debt.

Short-term debt greatly exceeds short-term assets by VND 36.4 trillion or ($1.52 billion). These figures are indeed very alarming.

In the latest draft statement on Vietnam Airlines, Deloitte Airlines said Skyteam’s ability to continue day-to-day operations will depend entirely on state aid. This financial support takes the form of loans from commercial banks and financial institutions and is also payable to suppliers and donors respectively.

cause for concern


On June 30, Vietnam’s national airline declared negative equity of VND 4.9 trillion or ($209 million), all of its liabilities exceeding assets of VND 36.435 trillion and its outstanding amounts at more than 14, 85 trillion VND.

This has raised many concerns from professionals, and past auditors have raised these issues recorded in the airline’s financial report in the second quarter of last year.

Moreover, the airline saw its revenue rise to over VND 30 trillion in the first half of 2022. This is considered very impressive as it is more than double that of last year in the same quarter. .

However, headwinds remain, like any other airline. Due to the rising cost of raw materials and fuel, the airline has temporarily suspended plans for expansion and resumption on certain routes. In fact, Vietnam Airlines launched its maiden flight to Phuket, Thailand on September 1 as flight VN9625.

With the maiden flight to Phuket being exceptional, the airline still incurred a total of VND5.1 trillion in losses, compared to around VND2 trillion in the first half of 2021.

The airline, unfortunately, recorded a total loss of VND 28.9 trillion on June 30, closing the second quarter. This means that the airline uses different liquidation methods for its aircraft, aircraft parts, aircraft engines and other financial portfolios.

In order to increase its capital, Vietnam Airlines has so far sold an aircraft, transferred contracts on the right to purchase and lease an aircraft engine, and liquidated its Cambodia Air investment arm. Thanks to these spinoffs, the airline earned 860 billion VND.

Vietnam Airlines Fleet Restructuring


Vietnam Airlines also reconsidered its fleet plans and negotiated the cancellation of orders for a total of four Boeing 787s and Airbus A320s. It is in talks for five more possible cancellations of other new planes by the end of this year, and 2023, instead of 2020 and 2021, as previously agreed. The airline finally decided to delay the delivery of new planes.

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