Vietnam private carriers seek zero interest loans

The Vietnam Aviation Business Association (VABA) has proposed an interest-free loan package for private airlines, similar to the one accorded national carrier Vietnam Airlines.

The airlines are bearing high costs while revenue has declined drastically, but they have to maintain equipment and workforce so as to restart when the market recovers, VABA vice president and general secretary Bui Doan Ne, said at a recent meeting to discuss a bailout package for enterprises.

Ne suggested stronger support from the government, including a preferential loan package with zero percent interest, similar to the one given to Vietnam Airlines.

This year, the State Bank of Vietnam (SBV) has provided a refinancing loan of VND4 trillion ($173 million) at zero percent interest for one year to support Vietnam Airlines.

The support for aviation businesses is necessary because this is an industry that has the ability to recover quickly when the economy opens and is also a major contributor to the state budget, Ne said.

Vietnam Airlines, budget carrier Vietjet Air, the Airports Corporation of Vietnam (ACV), and the Vietnam Air Traffic Management Corporation (VATM) contributed over VND22 trillion in taxes and fees to the state budget in 2019.

He said aviation development will spur tourism in particular and the economy as a whole. Some estimates say aviation growth of 2.5 percent will stimulate 1 percent of GDP growth.

Nguyen Tuan Anh, head of the central bank’s Credit Department, said that it was planning a VND3 trillion aid package for enterprises.

Nguyen Quoc Hung, general secretary of the Vietnam Banks Association, noted that not only airlines but a number of other businesses in the hospitality field were also severely affected by the pandemic and need support.

“We should not support some industries while ignoring others as it would create inequality,” Hung said.

The aviation industry has been among the hardest hit by the Covid-19 pandemic. In the first seven months of this year, Vietnamese carriers served 13.7 million passengers, down 32 percent year-on-year, according to the General Statistics Office.