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Decision on VNA’s capital raising plan to be made soon

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HCMC – The final decision on increasing capital for Vietnam Airlines (VNA) to grow further will be issued soon, according to Duong Tri Thanh, general director of the national flag carrier.

The State holds an 86% stake in the aviation firm, which has contributed VND26 trillion to the State budget over the past five years. In the time to come, VNA’s owner will adopt measures to raise capital to boost the development of the airline, Thanh noted at an annual general meeting of shareholders held today, August 10, in Hanoi.

Addressing the meeting, VNA Chairman Pham Ngoc Minh said the governments of many countries have offered Covid-19 relief packages to their carriers. To date, all reports of VNA’s business performance have received a positive response.

The Vietnamese Government asked VNA and the Commission for the Management of State Capital at Enterprises to present measures to support the carrier to the Government’s higher-level body, including offering VND4-trillion soft loans and raising the ownership capital by VND8 trillion.

The carrier is working on final procedures to present the proposal to raise capital, Minh affirmed.

Earlier, at the meeting, responding to shareholders’ inquiries, Thanh said that the local aviation industry had recovered up to 90% between May and July 28. Meanwhile, China recovered 60% and Japan at some 70% during the period.

In its report released in May, VNA had forecast that the local aviation market would recover in the last quarter of this year. In reality, the market started bouncing back last month, but then the recovery momentum was disrupted by the resurgence of the virus, leading to a sharp fall in the number of flights now.

On August 8, VNA operated just 105 flights, a sharp plunge compared to the 500 seen daily during the recovery period and equivalent to 28% of the previous year’s figure.

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