The newest addition to Vietnam Airlines’ fleet has arrived. The first of three A320neos due has landed in Vietnam. The plane, VN-A513, comes via ICBC Aviation Leasing. It is the first A320neo across the wider Vietnam Airlines fleet. The plane will slot in alongside the airlines’ narrowbody fleet of 70 Airbus A321s.
The deal for the A320neos was signed in June 2019. At the time, Vietnam Airlines was flying high. Revenues and profits were higher than predicted on the back of an aviation boom in the country. Times were good, and Vietnam Airlines was eyeing expansion plans and further growth.
2020 put the brakes on that. Vietnam Airlines stopped flying entirely in March and April. That caused revenues to dry up, and the airline struggled to meet outgoings. By May, some of its domestic flights were back in the air. But the schedules were a fraction of what they formerly were. On the Hanoi – Ho Chi Minh route, usually one of the world’s busiest, Vietnam Airlines was operating just 23 flights per day.
Meanwhile, Vietnam Airlines’ international flights were suspended back in March. 2020 was shaping as a serious challenge for an airline that was previously growing at a rapid clip.
After earning US$4.3 billion in the 2019 financial year, Vietnam Airlines is now flagging losses around US$655 million this year.
Earlier this month, Airways Magazine had Vietnam Airlines’ chief accountant, Tran Thanh Hien saying the airline was in “really bad” financial trouble. The airline was having difficulty meeting day-to-day expenses such as salaries and ground handling fees.
The airline wants a loan from the Vietnamese Government. But Tran Thanh Hien says it’s not a loan – it’s an investment that will get paid back. Since you were asking, the airline would like at least half a billion US dollars to tide it over.
Vietnam Airlines is predominately a state-owned carrier. The Vietnamese Government has an 81.6% stake in the airline, and the Prime Minister personally oversees who gets appointed to the airline’s board. So, it’s a bit like swallowing your pride and going to have an uncomfortable chat with Dad.