Vietnam gov’t urges six agencies to help Bamboo Airways stay afloat

Deputy Prime Minister Le Minh Khai has asked six government agencies to support Bamboo Airways to overcome its hardships and successfully restructure its operations.

Khai’s instruction was announced by the Government Office after a recent cabinet meeting aimed at finding solutions to the airline’s troubles that included prolonged losses and heavy debts contracted with its partners and the state budget.

The six agencies tasked with helping Bamboo Airways’ survival are the Ministries of Transport, Planning and Investment, Finance, Public Security, State Bank of Vietnam, and the Commission for Management of State Capital at Enterprises (CMSC).

They are requested to submit proposals to the prime minister for consideration by December 31.

Khai also asked for cooperation from the airline’s partners such as Vietnam National Petroleum Group (Petrolimex), Airports Corporation of Vietnam (ACV), and banks like Maritime Bank, Sacombank, Orient Commercial Bank (OCB), and National Citizen Bank to handle the carrier’s debts.

In mid-August, Prime Minister Pham Minh Chinh asked government agencies to remove hurdles faced by Bamboo Airways.

Established by real estate conglomerate FLC Group in 2017, the carrier conducted the first commercial flight in January 2019.

After the arrest of its chairman Trinh Van Quyet on charges of stock market manipulation in March last year and hard hit by the Covid-19 pandemic, Bamboo Airways has reported losses and been forced to undergo a comprehensive revamp.

It has closed international services and is operating 16 domestic routes with a 10 aircraft fleet.

With surges in management and financial costs, the carrier’s net loss jumped 7.7 times that of 2021 to VND17.62 trillion ($725 million) last year, even larger than the combined loss of two other domestic competitors Vietnam Airlines and Vietjet Air.

As a result, it had a cumulative loss of VND19.34 trillion ($795.7 million) as of end-2022 and an equity of negative VND836 billion ($34.4 million).

Its liabilities reached VND18.84 trillion ($773 million) at the end of 2022, VND8.77 trillion ($361 million) higher from a year earlier.

For 2024, Bamboo Airways aims to make a breakeven in the fourth quarter and reduce its full-year loss to VND1 trillion ($44 million).