The Vietnamese government is considering extending the debt repayment of Vietnam Airlines’ refinancing loan to avoid the airline from facing financial difficulties and potential bankruptcy. The extension would involve automatically extending the loan repayment three times, with each extension equal to the initial refinancing term, for a total duration of up to 5 years.
Since July 2021, Vietnam Airlines has utilized a loan package worth approximately VND 4,000 billion, with the majority being allocated for aircraft lease contracts, engine rentals, supplies, spare parts, and flight services. The company has also paid interest on the loan to banks. However, the government is now proposing extensions for the repayment of this loan to prevent insolvency.
The Economic Committee has supported the proposal, highlighting the importance of extending debt repayment to maintain Vietnam Airlines’ role as the national airline and preserve state capital invested in the company. However, there have been concerns about improving the preparation of documents and procedures to ensure timely reporting to the National Assembly for consideration.
Vietnam Airlines has set ambitious revenue targets for this year, aiming for record-high levels in revenue and profits. The company plans to divest capital from subsidiaries and improve profits to achieve its financial goals. Despite facing challenges like rising fuel prices and intense competition in the industry, Vietnam Airlines remains optimistic about its future growth and success in maintaining its position as one of Asia’s leading airlines.
