VIETNAM AIRLINES JSC

Created in 1956, VIETNAM AIRLINES is known as a leading company in the field of aviation transportation. However, the subject has currently faced strong competition from cheap airlines such as Bamboo, and Vietjet.  

Since 2020, the subject's business results have been weak due to the influence of the COVID-19 pandemic. The National Assembly approved a Covid relief package worth VND 12 trillion for VIETNAM AIRLINES, including offering soft loans worth VND 4 trillion and raising the ownership capital by VND 8 trillion by issuing shares to its existing shareholders. Accordingly, on 07 Jul 2021, VIETNAM AIRLINES signed a credit deal – worth a total of VND 4 trillion with three banks (SeABank, MSB, SHB). In addition, on 13 Sep 2021, the State Capital Investment Corporation (SCIC) disbursed VND 6.894 trillion (equivalent to USD 300 million) to buy HVN shares, holding over 31% of its charter capital. These two solutions approved by the National Assembly helped to ease difficulties and improve the financial situation of VIETNAM AIRLINES during the pandemic.

In 2022, the airline industry recovered gradually. Vietnamese carriers transported 11 million foreign passengers in 2022, up 22 times from 2021 but down 70% from 2019, the year before the pandemic. However, airline firms were still lost due to higher fuel prices and foreign exchange volatility. It is noted that Ho Chi Minh Stock Exchange had ever warned that its stocks could have been delisted if the parent company's after-tax profit was negative or the equity of VIETNAM AIRLINES was negative in Feb 2023. After that, the stocks of VIETNAM AIRLINES have been put into restricted trading status since 12 Jul 2023 because it has been late in reporting the audited financial statements for FYE 31 Dec 2022. VIETNAM AIRLINES stated that the restricted trading status of stocks has not impacted its business activity. The operation has positively recovered since 2023. However, as of 31 Dec 2023,  VIETNAM AIRLINES’s accumulated losses amounted to VND 41.057 trillion, exceeding its owner’s investment capital by VND 17.126 trillion. Hence, transactions with the subject could be proceeded under strict monitoring.