Due to late payment of debts, SAGS has stopped providing ground services to Bamboo Airways
The reason given by SAGS is that Bamboo Airways has overdue debts, and despite the company’s efforts to work with the airline, the progress of debt repayment has been very slow. Therefore, the two sides have agreed to terminate their cooperation from January 1, 2024.
Currently, Bamboo Airways is undergoing restructuring, and its fleet has been significantly reduced from 30 to 7-8 aircraft.
Regarding the termination of cooperation with Bamboo Airways, SAGS’s management believes that it will not have a major impact on the company’s business operations because the number of flights handled is insignificant. Instead, SAGS has just signed additional service contracts with several new international customers.
SAGS is currently a ground handling service provider serving 50 international airlines and domestic airlines including Vietjet, Bamboo Airways, and Vietravel Airlines.
However, on the other hand, SAGS’s management surprisingly mentioned that Vietjet has planned to self-serve at Tan Son Nhat, Da Nang, and Cam Ranh airports. However, Vietjet has not yet announced a specific timeline.
According to Mr. Dang Tuan Tu, in 2023, the company made a provision of 70% for the receivable from Bamboo Airways (VND 53.6 billion), and also made a provision of VND 6.6 billion for the receivable from Vietravel Airlines.
“However, the company’s major focus this year must be on successfully bidding for the provision of ground handling services at Long Thanh airport. This decision will determine the company’s future existence and development,” emphasized the Chairman of SAGS.
According to the plan for 2026, Long Thanh airport will begin operating phase 1. 80% of international flights from Tan Son Nhat will be transferred to Long Thanh airport. “If we do not win the bid for the service at Long Thanh airport, the company will also lose a lot at Tan Son Nhat,” said Mr. Tu.
The company affirmed its determination to prioritize the preparation of bidding documents and provide services at Long Thanh airport. In addition, the company aims to focus on improving quality and making efforts to find new customers, with a focus on the Chinese market.
Assessing the aviation industry market in 2024, SAGS believes that international flights will recover but at a rather slow pace. China tends to stimulate domestic tourism rather than international tourism. In Russia, the prolonged war and sanctions are making it difficult for the country’s tourism industry.
“This year, slots have just been granted for direct flights to the Russian market, but it is still very difficult,” said Mr. Tu.
In addition, Vietnam Airlines and Vietjet are affected by the engine recall, which has forced many aircraft to be temporarily grounded, reducing their operating capacity. The number of aircraft grounded has accounted for 20-30 aircraft of these two airlines. This shows that the airlines’ transport capacity has been reduced, while their financial situation has also weakened considerably.
The aviation industry is still being affected and has not yet recovered, and airlines have not been able to increase their operating capacity and are still slow in paying service providers.
In 2024, SAGS plans to achieve a post-tax profit of VND 240 billion, an increase of nearly 6%
At the shareholders’ meeting, SAGS approved a plan for 2024 with consolidated revenue of nearly VND 1,500 billion, equal to the previous year, and after-tax profit of VND 240 billion, an increase of nearly 6%. Thus, despite the challenging market, SAGS still aims to earn hundreds of billions of dong in profit.
Mr. Dang Tuan Tu added that SAGS will combine the advantages of companies owned by Airports Corporation of Vietnam – ACV (managing and operating 22 airports), which is also the investor of phase 1 of Long Thanh airport.
The company will take multiple steps to develop services at Long Thanh, not just providing ground handling for airlines, such as operating in the terminal and cargo handling. “These are new directions,” said Mr. Tu.
