Vietnam considers zero-interest same day loans for all airlines
HANOI (Vietnam News / Asia News Network): The government office tasked the Ministry of Planning and Investment, the Ministry of Finance, the Ministry of Transport and the State Bank of Vietnam to study a proposal for the Vietnam Aviation Business Association (VABA), in which the airline industry must have access to 25 trillion yen (over 1.1 billion US dollars) in zero interest same day loans
The same day loans, according to VABA, are intended to help airlines cover recurring expenses, acquire supplies and new machinery, and perform maintenance tasks during the pandemic.
The amount of the loan will depend on the size of each airline, its market share and the amount it has contributed to the state budget.
The association cited a VN 4 trillion, zero-interest, three-year loan to Vietnam Airlines as the basis for its proposal, saying the government must ensure a level playing field. In addition, he also demanded a 70% reduction in the environmental tax for all airlines.
VABA President Phạm Việt Dũng said the tax was no longer applicable as almost all international and domestic flights were closed. VABA has therefore called on the government to reduce the tax from VNĐ 3,000, or $ 0.13, to VNĐ 1,000 by June 6, 2022.
In addition, VABA asked the government to consider a proposal to reduce airline income tax by 30% for 2020 and the first half of 2021, 50% on VAT, workers’ income tax industry and 50% on the taxable amount on aircraft spare parts.
The association said the third and fourth outbreaks of the novel coronavirus in Việt Nam resulted in a 90% drop in airline revenues, compared to the level before the pandemic.
A report from VABA said almost all international and domestic flights have been halted since May. Revenue fell 60% from the previous period, with airlines reporting a combined loss of VN 16 trillion in 2020.
According to Bùi Doãn Nề, vice president of the Vietnam Aviation Business Association (VABA), airlines had to pay more than 100 billion VN ($ 4.4 million) every day when 80 to 90% of their fleets were immobilized.
Short-term debts due among the three largest airlines totaled VN 36 trillion, with VNA alone amounting to VN 20 trillion. VABA asked banks for loans worth 30 trillion VN, of which 10 to 12 trillion VN allocated to VNA, 10,000 billion VN to Vietjet, 5,000 billion VN to Bamboo Airways, 5,700 billion VN from VN to Pacific Airlines and 1,000 billion VN to Vietravel Airlines.
In a recent development, VABA sent out a number of proposals on how to support the recovery of the airline industry. The proposals include faster vaccination of the population, a standardized Covid-19 testing protocol, internationally recognized vaccine passports and the establishment of safe travel corridors for international visitors.