Vietnam Airlines plans to set up cargo airline
In June, Vietnam Airlines’ revenue from cargo transportation, which normally accounts for 10% of the total, exceeded that of passengers for the first time.
Vietnam Airlines is considering setting up a cargo airline amid its business operation is severely affected by the Covid-19 pandemic.
|Overview of the meeting. Photo: Vietnam Airlines|
General Director of Vietnam Airlines Le Hong Ha revealed the move at the annual shareholder meeting held today [July 14].
“We came up with this idea a few years ago but it was not materialized due to different market factors,” Ha said.
The Covid-19 pandemic, however, has changed the situation and caused a sharp drop in the number of air passengers.
According to Ha, the national flag carrier has converted seven passenger planes into freighters, including five Airbus A350 and two A321.
In June, revenue from cargo transportation, which normally accounts for 10% of the total, exceeded that of passengers, noted Ha, saying this is the basis for Vietnam Airlines to consider setting up a cargo airline after the pandemic.
A report from the Ministry of Transport revealed revenue from freight service of airlines in the past year tripled compared to the pre-Covid-19 period.
Since early 2021, the severe Covid-19 situation, especially during the peak season in the Tet (Lunar New Year) holiday and the national holiday from April 30-May 1, continues to put pressure on the airline.
It is estimated that Vietnam Airlines suffered a loss of VND9.82 trillion (US$426.7 million) in the first half of 2021. For this year, the airline forecast consolidated loss to rising up to VND14.5 trillion ($626.8 million), a surge of 30% against last year.
The prediction was based on the assumption that Vietnam Airlines could sell 11 Airbus A321, the government allows tourists to return to Phu Quoc island in the southern province of Kien Giang, the application of vaccine passport, and the airline completes disbursing the full VND12-trillion ($521 million) government’s support package.
Last week, Vietnam Airlines signed a credit contract worth VND4 trillion ($173 million) with three banks of SeABank, SHB, and MSB, with the source from the refinancing fund provided by the State Bank of Vietnam (SBV).
At the meeting, the airline also announced the plan to issue shares for existing stakeholders to raise VND8 trillion ($347.6 million), scheduled to take place in the third quarter.
Chairman of Vietnam Airlines’ Directors of Board Dang Ngoc Hoa said proceeds raised from the move would be used to pay overdue debts and cover the operational expense
- Vietnam among Switzerland’s priorities for economic cooperation: Swiss President
- Japanese giants pledge further support for Vietnam
- ADB, PVN establish partnership to promote green energy development in Vietnam
- VinFast launches global EV brand at 2021 Los Angeles Auto Show
- Southern region’s manufacturers in need of support to restore operations
- Vietnam economy on track for recovery: World Bank
- PM clarifies Vietnam’s attraction to foreign investors
- Vietnam might extend current wind power feed-in tariff to March 2022
- Vietnam Gov’t plans to mobilize US$8 billion via G-bonds next 2 years to aid growth
- Without raising public debt, Vietnam would miss opportunities for growth: Investment Minister
Vietnam among Switzerland’s priorities for economic cooperation: Swiss President
Post-pandemic tourism: harnessing the value of cultural heritages
Marvelous season of marigold flowers in Ba Vi Mountain
Vietnam joins the world to end violence against women
Japanese giants pledge further support for Vietnam
Vietnam holds national cultural conference after 75 years
Surge in supply of Vietnam’s green buildings
Hanoi begins inoculating children with Pfizer Covid-19 vaccines
Initiative supports Vietnamese SIBs in addressing Covid-19 aftermath