Illustrative image (Source: VNA) Hanoi (VNS/VNA) - Aviation firms appealed for Government support toovercome the difficulties caused by the COVID-19 pandemic at a seminarrecently held by the Vietnam Aviation Business Association (VABA) inHanoi.
Nguyen Khac Hai, deputy general directorof Bamboo Airways, told the seminar last week that private airlines needed the same supportthat was being afforded to State airlines.
“Bamboo Airways has asked the National Assembly and the Government to considerthe same support packages for private airlines that have been approved forVietnam Airlines.”
Hai said the pandemic had severely affected the operation of airlines,and Bamboo Airways had lost up to 90 per cent of its business at thepeak of the pandemic.
Although the firm has not disclosed details of its business results in 2020, hesaid additional costs for quarantine and pandemic prevention had added to theairline's losses.
In response to this, Hai said Government financial support was necessaryfor firms to maintain cash flow alongside support policies such as taxbreaks.
Considered a private airline with a strong financial foundation, VietJet Air isforecast to lose in 2020. Vietjet Vice President and CFO Ho Ngoc YenPhuong told local media that VietJetAir needed 10 trillion VND in loans.
“Other domestic airlines want access to preferential loans over three tofive years from the State to overcome the crisis,” she said, asking theGovernment to simplify procedures to disburse support packages in a timelymanner.
Having been issued a support package of 4 trillion VND at 4 percentinterest recently, Nguyen Tien Hoang, deputy head of the Development PlanningDepartment at Vietnam Airlines, said the firm was still facing withdifficulties, estimating the recovery would take three to four years.
Hoang forecast that the localaviation sector would lose 4 billion USD in 2020, of which VietnamAirlines’ revenue would fall 608-652 million USD.
“Although the domestic market has recovered, purchasing power remains weakand ticket prices have dropped sharply. The only internationalroutes operating are repatriation flights. The pandemic has created a longterm psychological concern that has halted the aviation industry.”
Hoang said the Government and Ministry of Transport (MoT) should notconsider licensing new airlines before the market recovered.
According to the International Civil Aviation Organization (ICAO), there weretwo scenarios for the aviation industry. The first was a freefall followed byrapid growth, whilst the second was a three- to five-month baseline.
The ICAO forecast the aviation market would decline 48-71 percentdepending on the pandemic.
Pham Van Hao, deputy director of VABA, said the association was co-ordinatingwith research firms to submit a plan to the Governmentregarding reopening international flights.
Hao said: "In the most positive scenario, the aviation marketwill take three years to bounce back to where it was in2019."
Economist Tran Dinh Thien said given the Government held a 86 percent stakein Vietnam Airlines, the support package was transparent andmarketable. However, he said other airlines also needed refinancing interestrates from the Government to stand firm and bounce back when theglobal aviation market recovered.
Thien said local airlines should focus on the domestic market asa means to survive and recover from the pandemic.
“The pandemic has changed the structure of the global aviation industryand created opportunities for local aviation firms to better serve localcustomers.”
According to the association, in 2019, local airlines carried more than 136million passengers and operated more than 900,000 flights. However, thepandemic had disrupted economic activities, causing great lossesto the aviation industry.
Deputy Minister of Transport Le Anh Tuan said the ministry would continue tomonitor the situation and formulate policies to help the aviationindustry recover./.
VNA
