Aviation industry to suffer $649 mln loss
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Vietnamese carriers could suffer a loss of more than VND15 trillion ($649 million) this year with the suspension of commercial international flights still in effect.
The Vietnam Aviation Business Association says in a report sent to the Ministry of Planning and Investment that domestic airlines had already posted a loss of over VND18 trillion last year, with revenues plunging by VND100 trillion year-on-year.
In the first two months of this year, domestic carriers transported just 66,600 international passengers, down 98.8 percent year-on-year.
The association has repeated its request for credit assistance from the government.
Budget airline Vietjet Air has asked for a credit package of VND4-5 trillion for the 2021-2023 period, with an interest rate of 4 percent.
The association has also proposed reducing the environmental tax on fuel to VND900 – 1,000 per liter and extending deadlines for paying taxes, including corporate income tax, value-added tax, and personal income tax.
Bamboo Airways has called for a refinanced, zero interest long-term loan of VND5 trillion from commercial banks.
Earlier, the government approved a bailout package for national flag carrier Vietnam Airlines, with the State Bank of Vietnam (SBV) allowed to provide a refinanced loan of up to VND4 trillion at zero interest.
Aviation was among the worst hit sectors in 2020. The number of air passengers declined by 43 percent to 66 million, while cargo transport was down 15 percent to 1.3 million tons.
Insiders have said that it will take at least until 2023 for the aviation industry to recover to pre-pandemic levels.
Questions & Answers
Q.Why are Vietnamese carriers expecting significant losses this year?
Why are Vietnamese carriers expecting significant losses this year?
Vietnamese carriers anticipate a loss of over $649 million due to the ongoing suspension of commercial international flights. This follows substantial losses and plunging revenues experienced by domestic airlines last year.
Q.What kind of government support have airlines requested?
What kind of government support have airlines requested?
The aviation association has requested credit assistance from the government. Specific airlines have asked for credit packages, reduced environmental tax on fuel, and extended deadlines for various taxes, including corporate and personal income tax.
Q.How badly was the Vietnamese aviation sector affected last year?
How badly was the Vietnamese aviation sector affected last year?
In 2020, the number of air passengers declined by 43 percent to 66 million, and cargo transport was down 15 percent. Domestic airlines posted a loss of over VND18 trillion, with revenues falling by VND100 trillion.
Q.What is the expected timeline for the aviation industry's recovery?
What is the expected timeline for the aviation industry's recovery?
Industry insiders estimate that it will take at least until 2023 for the Vietnamese aviation industry to recover to its pre-pandemic levels. The sector was among the worst hit in 2020.
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