Several government ministries and private enterprises have been called on to help ‘Bamboo Airways resolve its difficulties by year-end’ by the Deputy Prime Minister Le Minh Khai, VN Express is reporting.
Key takeaways
- Petrolimex, the Airports Corporation of Vietnam, and several local banks have been asked to provide assistance;
- But it’s not clear what that means, (presumably debt forgiveness or discounted interest rates);
- The Ministries of Transport (MoT) and Finance (MoF) have also been tapped for support and are expected to have a report to the Prime Minister by the end of December; and
- It’s not clear what that might look like either (presumably tax cuts from MoF and advice from MoT).
Background: Bamboo Airways originated as a subsidiary of Vietnam’s FLC, primarily known for real estate development. However, during the pre-COVID real estate boom, FLC decided to diversify by venturing into the airline industry. Unfortunately, when the COVID-19 pandemic struck, it not only devastated the travel sector but also triggered a series of events that led to a significant downturn in Vietnam’s real estate market.
Caught in a precarious situation, FLC faced additional challenges when its General Director, Trinh Van Quyet, was arrested for stock market manipulation. FLC found itself in a difficult position, prompting the need for reform. As part of this restructuring, Bamboo Airways was spun off. However, the new airline carried with it huge debts and losses, making its journey since then a continuous struggle to overcome these financial challenges.
See also: Vietnam’s Bamboo Airways “a bizarre mess of an airline”