Vietnam Airlines on verge of bankruptcy, ministry warns

Vietnam Airlines is on the verge of bankruptcy, the country’s Ministry of Planning and Investment has warned, as losses and debts continue to accumulate while air travel demand fails to rebound. Despite government approval of a VND12t (US$519m) rescue plan aimed at returning the cash-strapped flag carrier to profitability, it is estimated to have sustained a loss of VND10t (US$435m) in the first half of 2021, the ministry said in a draft report on business development in the country during 2020 and the first five months of 2021, released on June 14. Overdue debts have reached VND6.24t (US$272m). Vietnam Airlines, which is 86% government-owned and 8.77% held by Japan’s ANA Holdings, is facing the threat of lawsuits because of its debts, while banks are no longer extending credit to the company, the report said, describing the company’s situation as “extremely dire”.<br/>