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Tag: Vietnam

  • Loans to small businesses a booming business

    Loans to small businesses a booming business

    The business of providing loans to small and medium firms is booming in Vietnam with the rise of several platforms offering more accessible credit than traditional banks.

    Bonbon shop, a platform that helps 35,000 grocery stores connect with over 24 major manufacturers, recently launched a credit option of up to VND200 million ($8,563) for stores to buy supplies.

    The operator of the platform, DMSpro, has partnered with e-wallet SmartPay and lender VPBank to make the loans accessible.

    EVNFinance, a credit provider unit of the national utility Vietnam Electricity, recently launched loan packages of up to VND500 million for 36 months.

    It said borrowers could receive the money within eight hours of making their requests.

    Several foreign credit platforms have been making their way into Vietnam since earlier this year.

    Singapore-based fintech firm Validus entered Vietnam in January and appointed Dinh Van Binh, former vice chairman of Sacombank Investment, as its CEO.

    Vishal Shah, chairman of Validus’ emerging markets, said Vietnam was one of its main markets and the company will continue to invest to expand its presence.

    Also in January, Funding Societies, which claims to be the largest digital financing platform for small and medium companies (SMEs) in Southeast Asia, said that it had disbursed $20 million in loans in Vietnam and targets to increase this to $90 million this year and $1.3 billion in 2025.

    The company estimates that Vietnam has a credit “gap” of around $58 billion in funding SMEs, referring to the amount of money that small and medium businesses have not been able to borrow because of administrative and other blocks.

    Nearly 46.8 percent of companies in Vietnam reported difficulties in accessing traditional bank loans last year, compared to 40.7 in 2020, according to a report by the Vietnam Chamber of Commerce and Industry (VCCI).

    Small companies often have to borrow money from friends or family or even assets to submit as collateral to raise capital, it added.

    Because of these challenges, the SMEs credit market is set to be the next race of many finance organizations, said Hoang The Hung, deputy director of EVNFinance.

    VPBank leaders said they have seen its funding for SMEs rising in the last six months as businesses restarted their operations and needed funds. They expect even stronger growth in the near future.

  • Coffee chains brace for impact as inflation creeps in

    Coffee chains brace for impact as inflation creeps in

    Highlands Coffee, one of the largest coffee chains in Vietnam, earlier this month hiked its prices by 10-15 percent. It said that the increase served to maintain product quality amid market fluctuations.

    Hoang Viet, CEO of Laha Cafe, said that coffee chains are seeing costs of coffee surging by 25 percent and rents by 10-20 percent.

    “Some ingredients are seeing costs rising 20-30 percent. Without a price increase, coffee shops cannot survive.”

    Beverage chains are starting to feel the burden of inflation on their business as surging commodity prices eat into their profit and threaten to bring losses.

    Gasoline prices in Vietnam rose by nearly 52 percent between the first half of this and last year.

    The Young Cafe has recorded an input increase of between 10-30 percent, mostly because of rising transportation costs.

    “Coffee chains often maintain their prices for one or two months before hiking them up,” said founder Nguyen Vo Trung Quan.

    But major chains like Starbucks, Phuc Long, The Coffee House and Chuk Coffee & Tea have not announced plans to raise prices, with the latter even affirming that there will not be a price hike in at least the next several months.

    Vietnam’s food, beverage and accommodation industry is just now recovering from Covid-19 impacts.

    It recorded the first growth in the second quarter this year (25.92 percent) after three consecutive quarters of decline.

    The rising demand for beverages amid high heat could be partly responsible for the growth.

    Delivery app GoFood saw orders in the second quarter surging 42 percent year-on-year, while ShopeeFood said it had received a rise in orders in May and June but did not reveal specific figures.

    This surge in demand makes F&B companies reluctant in hiking up prices as this could hamper growth.

    A media representative of The Coffee House said that it has recently launched new products that broke pre-pandemic revenue records.

    “Our number of outlets have returned to the pre-pandemic level of 154 and it is set to grow fast.”

    Some other chains, like The Running Bean, have removed some items from their menu as prices of ingredients have surged.

    But eventually, a price hike is unavoidable in the industry.

    Viet said that Laha Cafe is working on new products with higher profit margins and is looking for new locations further away from central business districts to reduce costs.

    “But we are also considering raising prices of some products, otherwise we cannot keep the business running.”

    Quan has moved a location of The Young Cafe from the central District 1 to District 10 to cut costs, and if input costs rise by 50 percent, he will hike menu prices.

    “If inflation persists, sooner or later all shops will hike prices.”

    Lender HSBC forecasts that Vietnam’s inflation could hit 3.5 percent this year, but in the last quarter alone it could be 5.6 percent.

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  • VN-Index bounces back after tumble

    VN-Index bounces back after tumble

    Vietnam’s benchmark VN-Index rose 1.47 percent to 1,166.48 points Thursday but with plunging trade.

    The index closed nearly 17 points higher after losing almost 32 points on Wednesday.

    Trading on the Ho Chi Minh Stock Exchange (HoSE) fell by 27.9 percent to VND9.06 trillion ($388 million).

    The VN-30 basket, comprising the 30 largest capped stocks, saw 24 tickers gain.

    BVH of insurance company Bao Viet Holdings and VRE of retail real estate arm Vincom Retail led with a 3.8 percent gain.

    VCB of state-owned lender Vietcombank rose 3.7 percent.

    Other gainers included PNJ of Phu Nhuan Jewelry and VIC of biggest private conglomerate Vingroup, up 3.6 percent and 3.4 percent respectively.

    Four blue chips fell, with GAS of state-owned Petrovietnam Gas losing 1.8 percent, and FPT of IT giant FPT Corporation falling 0.5 percent. Foreign investors were net buyers to the tune of VND487.46 billion ($20.86 million).

    The HNX-Index at the Hanoi Stock Exchange, where mid and small caps list, was down 0.02 percent while the UPCoM-Index at the Unlisted Public Companies Market was up by 0.19 percent.

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  • Vietnam approves 2nd environmental tax cut on fuel

    Vietnam approves 2nd environmental tax cut on fuel

    Vietnamese lawmakers have approved the second environmental tax cut on gasoline starting next week to contain surging fuel prices, two months after the first reduction came into effect.

    In an extraordinary meeting Wednesday morning, the Standing Committee of the National Assembly greenlighted an additional 25 percent cut on environmental tax to bring it down to VND1,000 ($0.04) per liter from July 11 until the end of the year.

    The tax was originally VND4,000 per liter and was cut to VND2,000 in April this year.

    Starting next week the environmental tax on diesel will also be cut from VND1,000 per liter to VND500.

    The government initially proposed lawmakers to approve the cut starting Aug. 1, but Vuong Dinh Hue, chairman of the National Assembly, said Wednesday it should come into effect starting next week.

    He added that the government should consider bringing down value-added tax and special consumption tax on fuel to reduce the impact of rising fuel prices on inflation.

    The government estimates that the latest environmental tax break would bring the consumer price index this year down by around 0.15 percentage points.

    RON95 gasoline price has risen 41 percent to VND32,760 this year.

  • Grab adds heatwave surcharge on motorbike services

    Grab adds heatwave surcharge on motorbike services

    Grab has become the first ride-hailing firm in Vietnam to announce a new surcharge on its motorbike services starting Thursday.

    The surcharges are VND5,000 (20 U.S. cents) for each GrabBike trip and GrabFood order in some localities including HCMC, Hanoi, Hai Phong, Da Nang and Can Tho.

    GrabExpress services in HCMC and Hanoi will attract a surcharge of VND3,000 for each delivery.

    The surcharge will be applied “during extremely hot weather”, Grab said on its website without disclosing further details.

    The Singapore-based ride hailing firm is the first to roll out surcharges for hot weather conditions. Earlier, a surcharge of VND10,000-15,000 has been applied for late nights and the Lunar New Year holiday.

    In early March this year, Grab had raised all fares by VND500-2,500 to aid drivers coping with surging gasoline prices.

  • Dragon Capital buys 2.1 million shares of Sacombank

    Dragon Capital buys 2.1 million shares of Sacombank

    Asset management company Dragon Capital has bought 2.1 million shares of HCMC-based Sacombank, increasing its stake in the bank to 6.09 percent.

    On June 29, two affiliated funds, CTBC Vietnam Equity Fund and Norges Bank, bought 2.3 million shares of the lender while a third, Samsung Vietnam Securities Master Investment Trust, sold 200,000 shares.

    The value of the deal is estimated at VND47.5 billion (US$2.03 million) based on the share’s closing price last Wednesday.

    Funds under Dragon Capital own 114.8 million shares or a 6.09 percent stake in the bank.

    In March, Dragon Capital had raised its stake from 4.98 percent to 5.05 percent, after its largest fund, Vietnam Enterprise Investment Limited, bought 1.25 million shares.

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  • 2 new casinos proposed for foreigners

    2 new casinos proposed for foreigners

    The Ministry of Finance is backing proposals by Da Nang City and Khanh Hoa Province to license two new casinos meant exclusively for foreigners.

    The casinos would be built at entertainment and resort complex Sun World Ba Na Hills in Da Nang City and Hon Tre Island in Khanh Hoa Province, it said in the proposals it has forwarded to the government.

    The two locations have large tourism potential and are especially attractive to foreign visitors, it added.

    Da Nang has no major casino yet, while Khanh Hoa has received approval to build a casino and resort complex in KN Paradise in Cam Ranh, and construction is ongoing.

    But the ministry refused to back a proposal to build a casino by the central province of Binh Thuan, deeming its tourism potential low and pointing to its lack of port or airport.

    The ministry also recommended the extension of a trial program allowing Vietnamese to gamble at the Phu Quoc Casino until 2024.

    With gambling considered a “social evil” in Vietnam, locals have only been allowed to enter the casino since the end of 2018 in a trial program originally meant to last three years.

    But the finance ministry is now seeking to extend it since casinos were hit hard by the Covid-19 pandemic in the last two years.

    The Phu Quoc Casino saw revenue grow by 9.5 percent in 2019 and 2020 before falling by 10 percent in 2021.

    Vietnam has nine casinos, including three major ones on Phu Quoc Island in Kien Giang Province, Quang Nam Province and Ba Ria – Vung Tau Province.

    All nine lost money last year.

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  • Vietnamese currency hits 2-year low against dollar

    Vietnamese currency hits 2-year low against dollar

    Vietnamese banks on Monday traded the dong against the U.S. dollar at the lowest rate in two years as the greenback strengthens globally amid economic uncertainty. The Vietnamese dong declined by 0.3 percent from last weekend to VND23,510 per U.S. dollar at state-owned Vietcombank.

    It fell by 0.34 percent at BIDV and 0.26 percent at Vietinbank, also state-owned lenders. Among private lenders, the currency is 0.21 percent weaker at Sacombank, and 0.17 percent weaker at Eximbank. The changes came after the State Bank of Vietnam on Monday let the Vietnamese dong slide by 0.04 percent against the greenback to VND23,121, the lowest this year.

    It has been pumping more U.S. dollar into the market to reduce pressure on the exchange rate.

    RongViet Securities estimates that the central bank has sold over $10 billion to the market this year, or around 10 percent of Vietnam’s foreign exchange reserves, to stabilize the market.

    The U.S. Dollar Index has been hovering around a 20-year high mark since last month amid global economic uncertainty caused by the Russia-Ukraine crisis and supply chain disruptions due to China’s “zero-Covid” policy.

    Concerns of global inflation has urged investors to buy more U.S. dollars as a safe-haven currency.

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  • Bamboo Airways to triple fleet size in 6 years

    Bamboo Airways to triple fleet size in 6 years

    Bamboo Airways plans to triple its fleet size to 100 by 2028, with new aircraft being delivered this quarter, despite major changes in its leadership.

    The airline is set to receive its 22nd narrowbody Airbus A321 jet and fourth widebody Boeing B7s87 this quarter, CEO and chairman Dang Tat Thang told shareholders at the recent extraordinary shareholders’ meeting of its parent company FLC.

    The airline currently has 29 jets, comprising 21 narrowbody aircraft, three Boeing B787s and five Embraer 190 regional aircraft, according to aviation data website Planespotters.

    Its competitors Vietnam Airlines operates 99 aircraft, and Vietjet 77. Thang became the new chairman of Bamboo Airways and FLC in March to replace Trinh Van Quyet who was arrested for alleged stock manipulation.

    The airline saw revenues rising 150 percent between the first and second quarter this year as travel resumed, Thang said. Bamboo Airways now operates nearly 200 flights a day on 60 domestic routes and 12 international routes, he added.

    It has recently increased pilot wages by 20 percent, he said.

    While FLC is set to experience a complete restructure this year, it will continue to expand Bamboo Airways’ operation both domestically and internationally, with the aim of making it a five-star airline of global standard, Thang said.

    “To achieve this goal, Bamboo Airways needs many new investors to increase its capital.”

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  • Vietnam textbook publisher reports record net profit

    Vietnam textbook publisher reports record net profit

    State-owned Vietnam Education Publishing House experienced its most profitable year in 2021, earning VND287 billion ($12.3 million) in after-tax profit. The profit was 2.5 times higher than the target set by the Ministry of Education and Training and the highest earnings in the publisher’s history.

    In previous years, the publisher’s after-tax profit hovered between VND120-150 billion a year. A recently released business report says the publisher printed more than 164 million textbooks last year, exceeding the annual target by about 40 percent. Its earned total revenues of VND1.8 trillion, over 97 percent of which came from book publishing.

    The company had a return on equity (ROE) of 39.9 percent and a return on total assets (ROA) of 17.9 percent. The publisher’s seven subsidiaries also reported profits totaling VND46 billion. Another factor in the improved performance was the increase in textbook prices.

    In the 2020-2021 school year, the prices of textbooks were two to four times higher under the new general education program.

    The publishing house explained that prices went up because the cost of all four components – the number of books in one set for each grades, the cost of organizing the manuscript, the cost of materials and the cost of marketing – increased significantly.

    Textbooks are not currently on the list of items priced by the State, but by enterprises that have to declare their prices to the Ministry of Finance. Publishers are solely responsible by law for the correctness and suitability of their pricing structures.

    The education ministry had asked the publisher to review the entire process of compilation, printing and distribution to reduce the prices of textbooks. Following this, a 3-9 percent reduction was made over the original declaration.

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  • Vietnamese fork out less for pork

    Vietnamese fork out less for pork

    Vietnamese families have been consuming less pork in recent months as prices increased, switching to other sources of protein like chicken and eggs.

    Ngoc Thao from HCMC, 32, said that one kilogram of bacon now costs between VND150,000-180,000 ($6.43-7.72), depending on whether it is purchased at a traditional wet market or a supermarket.

    Cheaper cuts of pork, such as cutlet and thigh, range from VND100,000-130,000 per kilogram, which is twice or thrice the price of chicken.

    “The prices of vegetables, spices and many other things have skyrocketed, but my salary remains unchanged, so I must cut back on my spending on expensive stuff,” she said, sighing.

    “Now our family has meat only for one or two meals per week.”

    A survey of livestock farms at the end of June found that the price of live pigs had crossed VND60,000 per kg, a slight increase from previous days.

    The majority of farmers said the price has increased because the cost of animal feed has increased. Prices of new born pigs have also increased by 20 percent compared to two months ago.

    According to the Organization for Economic Cooperation and Development (OECD), the majority of Vietnamese people have been eating less pork, like Thao’s family.

    From 2016-2018, Vietnam had one of the highest average pork consumption rates in the world at 30-31 kg per person per year. However, during the first two years of the pandemic, this fell to 26 kg.

    Data from Ipsos, a multinational market research firm based in France, showed similar results by compiling statistics on the entire supply of cattle and poultry farms in 10 key livestock provinces and cities, in conjunction with official import and export volume, quotas, and meat products.

    It calculated that each Vietnamese person used to consume about 30 kg of pork per year, but by 2021, this had dropped to 23.5 kg.

    According to Phong Quach, director of Ipsos Vietnam, per capita meat consumption in Vietnam has been increasing as living standards improve, and consumers have more meat sources to choose from.

    He said there were three reasons why pork was no longer the top priority.

    First, the African swine fever got people worried and also severely impacted global supply.

    Second, the price of pork kept rising sharply, albeit intermittently, as input costs like that of logistics rose significantly.

    Third, people were cutting back on spending in the post-Covid period and seeking cheaper animal protein sources than pork.

    For several years now, per capita consumption of poultry (primarily chicken) has increased rapidly – from 12 kg in 2016 to 20 kg now.

    Seafood has surpassed pork as the most important source of protein for Vietnamese people, accounting for per capita consumption of 29 kg per year.

    Per capita consumption of beef, which is more expensive than other meat, has increased slightly from 4.3 kg to 5 kg per year.

    The VNDirect Securities Company said in a meat industry analysis published at the end of May: “We believe that demand for meat is likely to increase when kids are on their summer break while restaurants and industrial kitchens continue to consume at the same rate as the first quarter of this year.”

    Quach said the fact that some local pig farms have sold their complete stock after the African swine fever outbreak will further decrease supply and increase prices in the coming months.

    The price of live pigs for slaughter is expected to remain at above VND60,000 per kg, higher than the VND51,000-54,000 range recorded between October 2021 and April 2022.

    The pressure to balance spending amidst rising prices makes short-term consumption recovery difficult, market observers say. But they add that despite the current situation, the pork market has a lot of room for future growth.

    According to the CEO of a publicly traded food company, the pork market is worth about $10 billion, but 90 percent of the products sold are unbranded.

    Meanwhile, consumers are becoming more health-conscious, and demand for branded, traceable meat products will rise once the price storm passes.

    According to the OECD, each Vietnamese person will consume approximately 27.7 kg of pork by 2023, a 7 percent increase over last year.

    By 2029, this figure could rise to 32.7 kg, higher than the pre-pandemic period, and surpass South Korea and China to take the lead in global per capita consumption.

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  • Finance ministry proposes tax cuts on gasoline

    Finance ministry proposes tax cuts on gasoline

    The Ministry of Finance has apprised the government of its plan to reduce special consumption tax and value-added tax on gasoline to bring its prices down.

    The plan was announced Thursday by a ministry official without disclosing further details.

    Currently special consumption tax is at 8-10 percent and value-added tax is at 10 percent.

    Gasoline prices rose to an all-time high of VND32,870 ($1.41) per liter last Tuesday.

    VND/literVietnam’s gasoline pricesRON 95E5 RON 92Dec 25 2022Jan 11 2022Jan 21 2022Feb 11 2022Feb 21 2022Jan 3 2022Nov 3 2022Mar 21 2022Jan 4 2022Dec 4 2022Apr 21 2022Apr 5 2022Nov 5 2022May 23 2022Jun 1 2022Jun 13 2022Jun 21 202220k22.5k25k27.5k30k32.5k35kApr 21 2022● E5 RON 92: 27 130

    Prices have surged by 65-70 percent since the end of 2021, burdening both consumers and businesses.

    Earlier this month, the ministry had considered halving the environment tax on fuel, but critics said a cut of VND500-1,000 is too little to have an effect and called for reduction in other taxes.

    Taxes and fees account for 35 percent of gasoline prices.

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  • Pi miners anxiously await monetization

    Pi miners anxiously await monetization

    Vietnamese people are expecting good money from cryptocurrency Pi following developer’s promise of a mainnet launch on June 28.

    The system is making steady progress towards transiting to launch by around Pi2 Day – June 28, the development team announced on the Pi Network app last Tuesday.

    Since Monday night, Pi miners in Vietnam have started to wait for the transition. Many claimed to be business owners and said they will accept the token as a payment method as soon as the coin can be exchanged.

    Pi and other cryptocurrencies are not legal tender in Vietnam, Dao Minh Tu, the deputy governor of the State Bank of Vietnam, has said.

    Huynh Tan of HCMC said he has signed in the app to earn rewards every day for the last three years.

    “I have joined the project since its beta stage. Now it is about to enter the mainnet stage, so I hope to be able to exchange Pi for money or something.”

    He said prices of thousands dollars is “very unlikely” as there are 100 billion tokens, but the ‘consensus price’ may be of any number.

    A poll on a Pi group found 75 percent of nearly 3,400 users believing in a ‘consensus price’ of US$6,700.

    “What will you buy first once each Pi token is worth thousands of dollars?”, a member asked on a Pi group with 100,000 members and attracted over 300 comments.

    Many said they intended to buy a house, a car or give away the money after selling the token.

    But investors will have to wait until developers allow them to transfer the token.

    Last year, Pi announced it had entered mainnet, but that will be split into two phases: closed and open network — the former allows user-to-user transactions, and the latter allows exchanging with other cryptocurrencies.

    Doubts

    Meanwhile, many are skeptical about the developer’s pledges.

    “There is no certainty in the statement, just a general announcement of mainnet launch around the Pi2 Day. They did the same thing last year, but there has yet been any development,” Anh Minh, a Pi miner said.

    Pi Network also made no announcement on its social media accounts on June 28 — an unusual move as most crypto projects constantly provide users new information during key phases.

    Over the last six months, the project has reduced mining rate, required users to lock up part of their token, and started the KYC (know-your-customer) process.

    Some users were allowed to exchange the token internally, but only as a demo.

    Up to date, the token cannot be exchanged with other cryptocurrencies, and mostly remain worthless.

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  • Samsung starts building 3nm smartphone chips in Korea

    Samsung starts building 3nm smartphone chips in Korea

    We’re slowly moving toward the size limitations of our Universe but before we reach that Planck volume, there’s still some wiggle room. This means smaller, faster, and more efficient chips in our smartphones of tomorrow.

    Let’s leave quantum physics behind, and go straight to the news (feel free to discuss Planck constants in the comment section below). After TSMC published its roadmap, shedding light on when we can expect 3nm and 2nm chips, now Samsung has announced the production start of its 3nm semiconductor chips in Hwaseong factory in South Korea.

    Samsung is moving to a new architecture, swapping FinFET (fin field-effect transistor) for GAA (Gate All Around). And if you’re worried that more physics is coming your way, just breathe. GAA offers several advantages over FinFET – the main one being higher power efficiency.

    Another new technology involved in Samsung’s 3nm manufacturing node is the nanosheet transistor manufacturing. It replaces the nanowire technology, again boosting efficiency and also performance in this case. Using nanosheets gives the ability to very easily adjust this efficiency and performance parameters by simply altering the size of the nanosheet.

    Samsung is quoting some impressive numbers, comparing the new 3nm node with the old 5nm manufacturing process. The new chips should come with 23% improved performance, a 45% reduction in power usage, and an area reduction of 16%, and this is just the first generation of 3nm silicon.

    The second generation will bring a hefty 50% increase in power efficiency, 30% better performance, and 35% less area. Here’s a little inspirational quote from Dr. Siyoung Choi, President and Head of Foundry Business at Samsung Electronics:

    “Samsung has grown rapidly as we continue to demonstrate leadership in applying next-generation technologies to manufacturing, such as foundry industry’s first High-K Metal Gate, FinFET, as well as EUV. We seek to continue this leadership with the world’s first 3nm process with the MBCFETTM. We will continue active innovation in competitive technology development and build processes that help expedite achieving maturity of technology.”

    The Korean company is also working to allow clients to design their chips faster and easier. Samsung’s SAFE ((Samsung Advanced Foundry Ecosystem) will be taking care of partners who want to design their 3nm chips using the new technology.
    The first 3nm smartphone processor leaving the factory will most likely be the next generation Exynos 2300 (S5E9935 codename Quadra). The jump to GAA and 3nm could rehabilitate the Exynos processors, which are not very popular among smartphone enthusiasts, and are lagging behind their Qualcomm counterparts. Samsung teamed up with AMD to try and turn things around (the Exynos 2200 is armed with the new Xclipse GPU based on AMD RDNA 2 architecture) but this partnership has yielded mixed results so far.
    With TSMC hiking the prices of its manufacturing processes, it’s also very interesting to see how would Samsung play its cards on that front. If the new 3nm node turns out to be cheaper at Samsung’s factories, it can swing the pendulum once again. On the other hand, don’t expect the next Galaxy S23 with Exynos onboard to be cheaper than the Qualcomm variant, as it won’t make any marketing sense.
  • Covid causes more turbulence for Pacific Airlines

    Covid causes more turbulence for Pacific Airlines

    The Covid-19 pandemic stopped Pacific Airlines’ recovery and worsened its financial situation, which is “extremely serious,” its parent company, Vietnam Airlines, informed shareholders last week.

    “The shortfall in cash flow and large overdue debts pose the possibilities of insolvency and termination of operations,” the carrier said, adding that it is seeking investors to restructure Pacific.

    In 2018 and 2019, the airlines was on course to recover with profits of VND34.3 billion ($1.48 million) and VND48.6 billion against losses of VND346 billion and VND907 billion the previous two years.

    Its revenues peaked at VND8-9 trillion during the period.

    It posted profits of VND150 billion in January 2020, a monthly record, before Covid-19 hit the aviation industry.

    “If it weren’t for Covid-19, we would have made a big profit,” its chairman and Vietnam Airlines’ deputy director, Trinh Hong Quang, had said in mid-2020.

    That year the budget carrier ended up with a record loss of VND2.14 trillion as revenues plummeted to VND2.6 trillion, a fourth of the previous year’s figure.

    At the end of 2020 it had total assets of over VND6.6 trillion, but its equity had eroded and was in the red.

    In 2021, it lost nearly VND2.31 trillion. Speaking about plans to restructure its subsidiary, Vietnam Airlines said the investor selection process faced legal and other obstacles due to the fact it is a state-owned enterprise.

    If no agreement is reached, its own situation would be at risk, it warned.

    It plans to seek shareholders’ approval to amend a clause in its charter to allow sale of its equity to third parties at the upcoming annual general meeting.

    Pacific Airlines was founded over 30 years ago after authorities approved foreign investment in the aviation industry. As a budget airline, it was expected to increase Vietnam Airlines’ penetration and competitiveness.

    Vietnam Airlines owns 98 percent of the carrier, including 30 percent it got back from Australian airline Qantas in 2020.