Vietnam Airlines is at risk of losing liquidity due to the need to repay the principal of a VND 4,000 billion refinancing loan from July 2024. The government has just announced a plan to extend the debt repayment for 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 its 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 and affect its relationships with aircraft lessors and service providers.
The Economic Committee has agreed that extending debt repayment for Vietnam Airlines is necessary to maintain its role as a national airline and preserve state capital invested in the company. However, the government is advised to improve its preparation of documents and procedures to avoid urgent situations and provide a clearer analysis of Vietnam Airlines’ debt repayment ability.
Vietnam Airlines has set ambitious revenue targets for this year, with plans to divest capital from subsidiaries and increase profits. In addition, it is exploring various strategies such as online casino partnerships and virtual reality in sports betting. Furthermore, it is considering cryptocurrency as a payment method and data security measures in its operations.
In Q1/2024, Vietnam Airlines achieved significant revenue growth compared
