According to information from VTC News, a representative from the Vietnamese Civil Aviation Authority has confirmed that Pacific Airlines will temporarily suspend operations on all routes starting from March 18, after returning all leased aircraft to its partner. The main reason is that the airline is restructuring its routes.
The representative also mentioned that Pacific Airlines will seek new partners to lease aircraft. Once the lease is secured, the airline will resume operations on the registered routes.
“Currently, the airline still has some unused aircraft that will continue to be returned after undergoing technical inspections as per the lease agreement,” the representative said.
Customers searching for flights can no longer find any schedules from Pacific Airlines.
According to a source from VTC News, returning all leased aircraft to its partner will eliminate some agreed-upon debts, helping reduce the financial burden for both Pacific Airlines and Vietnam Airlines. Vietnam Airlines has not commented on this information yet.
Pacific Airlines is the first low-cost airline in Vietnam, which was once invested by Australia’s Qantas Group. In October 2020, Qantas Group completed the procedures to withdraw from Pacific Airlines and transferred back 30% of the shares to Vietnam Airlines as a gift. By the first quarter of 2022, this deal was completed, and Vietnam Airlines held nearly 99% of the shares in Pacific Airlines.
According to Vietnam Airlines’ 2022 annual report, the airline incurred a net loss of nearly 11 trillion VND in 2022. Although this loss has decreased compared to 2021, the company has recorded the third consecutive year of losses, with negative owners’ equity of over 35 trillion VND.
According to the explanation, the consolidated losses in 2022 came from the loss of the parent company and Pacific Airlines, while the majority of other subsidiary companies had positive results and were profitable.
According to the audited financial statements of Vietnam Airlines, receiving additional shares of a company with negative owners’ equity resulted in Vietnam Airlines having to recognize an additional loss of 1.749 trillion VND in after-tax profit.
Also according to Vietnam Airlines’ 2022 annual report, Pacific Airlines recorded a total revenue of nearly 3.487 trillion VND, a pre-tax loss of 2.096 trillion VND, a decrease of 212 billion VND compared to 2021.
With three consecutive years of losses exceeding 2 trillion VND/year after the Covid-19 period, the accumulated losses of Pacific Airlines estimate to exceed 10.7 trillion VND by the end of 2022, with negative owners’ equity of 6.7 trillion VND.
Minh Anh
