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Without customers, private airline extends service suspension
Indochina Airlines will not re-open its lone route, suspended since the beginning of the month due to aircraft problems, until November 26 as it doesn’t have enough customers to break even.
The airline, Vietnam’s only private passenger carrier, can no longer afford to pay the nearly VND300 million (US$16,790) in fuel costs for each flight, local online newspaper VietNamNet reported, citing a statement from Indochina.
The carrier, which opened in November last year, now uses only one Boeing airplane for its Hanoi-Ho Chi Minh City service after suspending all other routes to cut costs amid extreme financial difficulty earlier this year.
But technical problems with the plane forced it to halt the service since November 1. Though the plane is now fixed, Indochina says it still can’t re-open the flights.
The Civil Aviation Administration of Vietnam has asked the airline to raise its capital and clear debts four times since June this year. As the airline has not managed to solve its financial problem, the Ministry of Transport is considering revoking its license, according to VietNamNet.
Tran Huu Phuc, director of fuel supplier Vinapco, was quoted by the newspaper as saying he was worried Indochina would not be able to clear unpaid bills totaling VND18 billion ($1 million).
Phuc said Vinapco now only sold fuel to Indochina on a pay in advance basis.
The private carrier also owes debts to other airport service providers estimated at more than VND30 billion, VietNamNet reported.
Early this month, an Indochina manager said the airline would have to raise another VND300 billion from its shareholders to stay in business. He also said many sharholders didn’t accept the bankruptcy option as they had already invested VND300 billion in the airline.
thanhnien
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