Temporary exit ban might be lifted for Bamboo Airways CEO

Luong Hoai Nam, CEO and legal representative of Bamboo Airways, could have his temporary exit ban lifted by authorities if the private carrier succeeds in obtaining bank guarantee for its tax debts.

The ban has been effective since September 11 as Bamboo Airways failed to fulfil tax obligations.

In a Tuesday working session hosted by the People’s Committee of Binh Dinh, where the airline is headquartered, the provincial Tax Department said the carrier owned VND304 billion ($12.2 million) in taxes as of September.

The department has deployed measures to handle the case, such as deducting money from the company's accounts, requesting account freezes, and proposing a temporary exit ban on its CEO and legal representative Luong Hoai Nam to the Immigration Management Department under the Ministry of Public Security.

A Bamboo Airways leader stated that the tax department’s measures and temporary exit ban were fully compliant with legal regulations. However, he noted that Bamboo Airways is undergoing restructuring, so such ban would pose significant challenges to the company in seeking partners, raising capital, and signing contracts.

As a result, the airline proposed to pay its tax debts in installments (VND10 billion or $400,480 per month) with a bank guarantee, and asked for the ban to be lifted.

The tax department agreed on the proposal, saying once bank guarantee documents are submitted, it would lift the exit ban on Bamboo Airways' legal representative.

The airline’s representative informed that on Tuesday afternoon, Bamboo Airways had initiated procedures to seek a bank guarantee for submission to tax authorities.

In a document sent to the Ministry of Finance, the General Department of Taxation, and the Tax Department of Binh Dinh province on October 3, the leadership of Bamboo Airways stated that despite the company’s vigorous actions and comprehensive restructuring efforts, it still faces numerous challenges.

The enforcement of tax debt collection measures and the exit ban has had negative impacts, significantly affecting all operations of Bamboo Airways. The company’s restructuring process has been interrupted, debt restructuring and capital raising efforts faced numerous difficulties, and its revenue experienced a serious decline.

Bamboo Airways stated that if the current difficulties are not removed promptly by authorities, the carrier could be forced to cease operations and face bankruptcy.

It claimed such a situation could lead to a domino effect, as banks might be unable to recover thousands of billions of Vietnam dong (VND1 trillion = $40 million) in loans; suppliers could not reclaim money for goods and services; the state could not collect tax debts; and consumers could lose an airline with quality services at competitive prices. Consequently, the aviation and tourism markets would suffer.

It begged authorities to support its restructuring efforts by lifting the tax-related enforcement measures, especially the temporary exit ban on Nam.

Bamboo Airways is the third-largest airline in Vietnam in terms of flights. The carrier targets total revenue of VND4.86 trillion ($196.9 million), with losses projected to drop to VND1.39 trillion ($26.3 million) this year.

It also plans to break even by 2025 and achieve profitability in subsequent years, with a goal of listing on a stock exchange within three years.