Vietravel Airlines licensed for air transport
The Saigon Times
HCMC – The Ministry of Transport has granted a business license for air transport to Vietravel Airlines, said Deputy Minister Le Anh Tuan on Thursday.
As per its license, Vietravel Airlines has total chartered capital of VND700 billion, with its business scope comprising passenger and cargo transport on domestic and international routes.
Based at Phu Bai International Airport in the central province of Thua Thien-Hue, the carrier got in principle approval from the Government in April. During its operation time of 50 years, Vietravel Airlines will be closely involved in travel services and provide transport services in Vietnam and other countries across the continent.
The project will be implemented within nine months from the date of investment principle approval and put into commercial operation from the following month. Therefore, Vietravel Airlines is expected to launch its maiden flight early next year.
As estimated, the airline will set aside around 55% of seats for some 35-40% of the customers of its parent firm Vietravel. The remaining seats will serve the demands of travel companies and other clients on charter flights.
Earlier, the Government sent a document to the Transport Ministry to approve the air transport license for the company, but asked the ministry to clarify the financial capability of the firm as per suggestions from other ministries.
According to the Ministry of Finance, the capital source for the establishment of Vietravel Airlines is funded by the issuance of inconvertible two-year bonds via a private placement, secured by a payment account of the firm at VPBank.
Meanwhile, Vietravel, the parent firm, reported a total payable debt of nearly VND1.6 trillion by June 30, including VND682 billion worth of short-term debt and VND715 billion of long-term debt and other interest amounts. Meanwhile, its pre-tax profit was minus VND65 billion.
Vietravel mainly relied on commercial loans to maintain its business operations. As the Covid-19 pandemic may linger until 2021, Vietravel may face many difficulties in debt solvency, especially when the VND700 billion worth of bonds are due in September 2021, said the ministry.
To meet the capital requirement, Vietravel Airlines has submitted a paper verifying its escrow account of VND700 billion at a commercial bank.
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