Vietnam Airlines has been hit hard by the Covid-19 pandemic as most of its planes have been grounded.
The national flag carrier has announced that it incurred a loss of nearly $102 million in the first three months while its consolidated revenue plummeted by $286 million over the same period last year, to reach $818 million.
The carrier claims that if the pandemic lasts unil the end of this year, it expects to suffer a loss of up to $854 million while its revenue may reach only $1.62 billion, or just a third of its business plan for this year.
The airline has suspended all international routes while maintaining only a few domestic routes. It has unilaterally delayed paying some due debts.
The carrier says it has about $150 million in cash but is running out of this reserve. As a result, it has to seek short-term loans to meet payment needs.
The short-term loan balance of the airline reached $152 million as March 20, 2020 while many of the due payments have been suspended. Its cash flow is expected to have a cumulative deficit of approximately over $640 million this year.
To ensure its solvency in 2020, the airlines says it needs a government support of $512 million that must be disbursed from April 2020.
In a recent letter sent to its staff, Vietnam Airlines president and CEO Duong Tri Thanh said the airlines has been facing particularly difficult and historic moment in its history as it has to suspend operations of nearly 100 among 106 aircraft.
“Like other airlines, we are facing vital challenges in our business activities,” Thanh wrote.