Jan 9, 2013

Vietnam - Air Mekong receives letters from creditors

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VietNamNet Bridge – Rumors have been spread out that Air Mekong, a private airline, may have to stop flying because of the big debts it cannot pay to partners.

Providing its first commercial flight in late 2010, Air Mekong has incurred the bigger loss than estimated, becoming a big debtor of aviation service providers.

Air Mekong has to stop flying?

A senior executive of Vinapco, the air petrol provider, on January 3 confirmed with Nguoi lao dong’s reporters that Air Mekong recently cannot make payment for fuel on schedule. Therefore, Vinapco has sent a document to the management agencies to report about this.

It seems that Vinapco has taken a cautious step when reporting the case to the watchdog agency. If Air Mekong continues refusing to pay debts, Vinapco would stop providing air petrol to Air Mekong under the business contract signed between the two sides, while it would not be accused of “deliberately interrupting air traffic.”

Vinapco has learned the lesson from a similar case some years ago. At that time, Vinapco stopped providing air petrol to an airline which also could not pay debts, leading to the interruption of the flights which then raised strong opposition from the public.

The representative of Air Mekong declined to reveal how much the airline owes to Vinapco, saying that the two parties still need to sit together to discuss the issue before a final figure is released.

He said that Air Mekong has committed to pay debts prior to January 15. Meanwhile, the airline has been guaranteed by a commercial bank. Therefore, Vinapco has agreed to freeze the old debts and continue providing fuel, provided that Air Mekong pays for fuel everyday.

Currently, Air Mekong buys VND1.3 billion dong worth of petrol a day to get enough fuel for its fleet of four airplanes.

Rumor has been spread that Air Mekong would have to stop providing flights for a certain period. Air Mekong’s booking agents have informed that they only have the air tickets for the flights until February 28, 2013.

The passengers, who access to www.airmekong.com.vn, or book ticket directly at booking agents, all have been told that air tickets for March have not been available, because it is still unclear about flight schedule in March.

Meanwhile, other airlines including Jetstar Pacific, VietJet Air have air tickets for the flights until July already. Especially, the national flag air carrier Vietnam Airlines has air tickets until December 2013.

An official of the Civil Aviation Authority of Vietnam (CAAV) has confirmed that CAAV has received the complaints from some service providers about the payment delays by Air Mekong.

However, when asked about why Air Mekong only has tickets until the end of February, he said that the ticket sale program still depends on the seasonable flight schedules of air carriers.

Another private airline fails?

Air Mekong is the third private airline licensed in Vietnam, after VietJet Air and Indochina Airlines.

Indochina Airlines, the first private airline in Vietnam, began incurring loss just six months after the first commercial flight. It also could not pay for air petrol and had its operation license revoked due to the serious financial problems.

However, it is still too early to say about the fate of Air Mekong. Meanwhile, analysts say the airline has been backed by powerful investors, who would not let the air carrier fall into the worst situation.

Air Mekong has the initial chartered capital of VND280 billion. In June 2012, it announced the plan to increase the chartered capital to VND600 billion with the ceremony of signing a cooperation agreement with a commercial bank.

In the latest news, Air Mekong has denied the insolvency. In the press released on January 4, Air Mekong affirmed it does not have overdue debts to Vinapco.

US$1=VND21,000

NLD


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