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Vietnam Airlines may face liquidity shortage from virus impact

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Flag carrier Vietnam Airlines may face a liquidity shortage from late next month due to the coronavirus pandemic impact, the government said on Tuesday, as it explores measures to help the firm.

[HANOI] Flag carrier Vietnam Airlines may face a liquidity shortage from late next month due to the coronavirus pandemic impact, the government said on Tuesday, as it explores measures to help the firm.

Though Vietnam has successfully contained its own outbreak and its airlines are quickly restoring and expanding their domestic operations to meet growing demand, a ban on international commercial flights is still in place.

"Without liquidity support, Vietnam Airlines will face a liquidity shortage from the end of August," Vietnam Airlines chief executive officer Duong Chi Thanh said in a news release on a government website.

The company will lose 50 trillion dong (S$3 billion) in revenue this year due to the impact of the pandemic, Mr Thanh said in the news release, which was issued after Monday's meeting of government economic advisors.

They were exploring measures to help the airline, in which the government holds the controlling 86.19 per cent stake.

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Nguyen Dinh Cung, a government economic adviser, said at the meeting the government needed to work out measures to protect its assets at Vietnam Airlines.

"As a shareholder, a government can lend, act as a guarantor or issue shares to existing shareholders to keep a company from going bankrupt," Mr Cung was cited as saying in the news release.

Shares of Vietnam Airlines have so far this year fallen by 22 per cent to 26,300 dong each.

The government has agreed to resume commercial flights to and from China after months of closure due to the coronavirus pandemic, but the frequency and timing of flights was still being discussed.

REUTERS

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