The Government's support for domestic carriers should create a fair playing field, aviation experts have said.(Photo tienphong.vn) Policies included tax and fee postponements as well as credit support.
The national carrier Vietnam Airlines in which the State holds the controlling stake, was the only airline to get approval from the National Assembly and Government for a loan package worth 4 trillion VND with a preferential rate. The rate would be equivalent to the lowest rate of debts that Vietnam Airlines raised in the market and the interest would be paid in stocks.
After Vietnam Airlines received the Government’s support, two private airlines, Vietjet and Bamboo Airways, despite reporting profits in 2020 both called for similar support .
Vietjet proposed a loan package worth 4-5 trillion VND with a loan term to 2023 and rate of around four percent interest per year.
Bamboo Airways asked for a loan worth around 10 trillion VND. Bamboo expected the Government would raise mechanisms for commercial banks to provide the airline with long-term loan worth 5 trillion VND while the rest of 5 trillion VND would be provided via refinancing at zero interest rate.
According to Pham The Anh, chief economist of the Vietnam Economic and Policy Research, if the credit support was provided to Vietnam Airlines, similar support should also be provided to other domestic carriers to create a fair playing field, providing they met the same requirements as Vietnam Airlines.
However, Anh said that support for aviation enterprises should be in the form of issuing shares to take advantage of the stock market rather than providing preferential loans which should be considered the last choice.
Can Van Luc, member of the National Financial and Monetary Advisory Council, said that credit support policies must be fair among all carriers.
According to the Vietnam Aviation Business Association, although private carriers reported aggregated profits last year, they all suffered losses in the aviation transportation business, at an estimated sum of more than 18 trillion VND in total.
The association predicted the aviation market would continue to have problems this year and that domestic airlines might face losses of more than 15 trillion VND coupled with the risk of cash flow exhaustion. Domestic airlines needed the Government’s support, the association said.
Besides new loans with preferential rates, the association also proposed Government reduce rates of existing loans by around two percent together with debt restructuring and payment postponements.
Further cuts on environmental protection tax for fuel was also proposed from 2,100 VND per litre to 900 – 1,000 VND till the end of 2021./.
VNA
