On Tuesday, Vietnam’s National Assembly cleared the way for a rescue package to assist its national airline, according to Reuters.
The capital injection will see the government’s holding company purchase 85 per cent of VND 8 million in new shares issued by Vietnam Airlines, reports Nikkei Asia. The remaining VND 4 trillion will consist of low-interest loans from the country’s central bank.
In the first nine months of the year, Vietnam Airlines swung to a net loss of VND 10.7 trillion ($460 million) due to travel restrictions and a fall in demand. As the country’s daily Covid-19 cases hold in the single digits, the Skyteam alliance member has since resumed some domestic routes
“Vietnam Airlines continues to work on solutions to reduce losses, implement effective production and business activities, and pay attention to worker benefits,” said a statement from the National Assembly, according to Nikkei Asia.
Earlier, Vietnam Airlines chief executive Duong Tri Thanh said the carrier would face difficulties in sustaining operations without some form of government assistance. As a cost-cutting measure, the airline has already slashed the salaries of pilots, flight attendants, and ground crew by around 50 per cent, according to VnExpress International.
It also parted ways with Qantas, which had a 30 per cent stake in Jetstar Pacific, amid the pandemic. The Vietnamese low-cost carrier will rebrand as its former name, Pacific Airlines, and maintain Vietnam Airlines as majority shareholder.