Doubts over Vietnam Airlines’ ability to continue flying

0

By Anh Tu September 1, 2022 | 5:07 p.m. PT

Vietnam Airlines staff check an airline plane at Noi Bai Airport in Hanoi, October 2021. Photo by VnExpress/Giang Huy

An auditing firm is skeptical about Vietnam Airlines’ ability to continue operations as its short-term debt exceeds short-term assets by VND36.4 trillion ($1.52 billion).

In a recent interim statement on the performance of Vietnam’s national flag carrier Vietnam Airlines, Deloitte Vietnam said the airline’s ability to continue operating will depend on government financial support, extended borrowing from commercial banks and financial institutions, as well as debts to suppliers and lessors. .

As of June 30, Vietnam Airlines’ shareholders’ equity was negative VND4.9 trillion ($209 million), with liabilities exceeding assets by VND36.435 trillion and delinquencies at over VND14.85 trillion.

The auditor had raised similar concerns in the financial report on Vietnam Airlines’ operations in the first half of 2021.

Vietnam Airlines said it recorded revenue of more than VND30 trillion in the first half of this year, double the same period last year, but due to high fuel prices and many international flight connections. which have not yet resumed operations, the carrier suffered losses of VND 5.1 trillion, compared to about VND 2 trillion in the first half of last year.

As of June 30, its cumulative loss was VND 28.9 trillion.

Vietnam Airlines is looking for sources of income, including the liquidation of aircraft, aircraft engines and financial investments. The company has so far sold one aircraft, transferred the right to purchase and lease an aircraft engine and liquidated its investment in Cambodia Air. He earned over 860 billion VND from these moves.

The airline also negotiated the cancellation of the receipt of four Boeing B787s and Airbus A320s; and is in discussion to receive five more new aircraft by the end of 2022 and 2023 instead of 2020 and 2021 as originally agreed.

Share.

Comments are closed.