Vietnam Airlines is facing the risk of losing liquidity due to the need to repay the principal of VND 4,000 billion in refinancing loans from July 2024. The Government has just announced a plan to extend the debt repayment of Vietnam Airlines’ 4,000 billion VND refinancing loan. This loan package was used by Vietnam Airlines from July to the end of 2021, with funds allocated for various purposes including aircraft lease contracts, engine rentals, supplies, spare parts, and flight services. The company also paid interest on the loan to banks.
To support liquidity, Vietnam Airlines is considering extending the repayment of the loan instead of repaying the entire principal balance from July to December 2024 as originally obligated. The Government is urging the National Assembly to approve three extensions for the loan, each equal to the first refinancing term, with a total duration of refinancing extensions not to exceed 5 years. Failure to extend the loan repayment could lead to insolvency for Vietnam Airlines, affecting its relationships with aircraft lessors and service providers.
The Economic Committee has agreed with the need to extend debt repayment for Vietnam Airlines to maintain its role as a national airline and preserve state capital invested in the company. However, the Government is advised to improve the preparation of documents and procedures to avoid urgent situations and to provide a clearer analysis of Vietnam Airlines’ debt repayment ability. The airline has set ambitious revenue targets for this year, with plans to divest capital from subsidiaries and increase profits.
In the first quarter of 2024, Vietnam Airlines achieved significant revenue growth compared to the previous year, with a consolidated profit mainly attributed to debt cancellation under an aircraft return agreement. The company is exploring various strategies to increase revenue and profitability, including online casino partnerships and the impact of virtual reality in sports betting. The role of cryptocurrency in payment methods and the importance of data security and encryption measures are also being considered in the company’s operations.