Clock is ticking for Vietnamese carriers

VIETNAM’S Indochina Airways and Trai Thien Air Cargo now have less than two weeks to clear their debts or the two carriers will lose their licences.

Indochina Airways stopped flying in 2009 while Trai Thien Air Cargo, which launched last year, has yet to start flying. Both have large debts – Indochina owes VND70 billion (US$3.3 million), although Trai Thien’s exact debt is unknown – but both owe a lot to the state-owned Vietnam Air Petrol Company (Vinapco), their primary fuel supplier.

The government’s Civil Aviation Administration of Vietnam (CAAV) has ordered both companies to pay the debts to Vinapco by the end of June or lose their licences.

The CAAV says that attempts to contact both companies have failed.

Last month, the CAAV sought permission from the government to withhold supplying fuel to Jetstar Pacific Airlines. Jetstar is now paying back its debts, slowly, but Tran Van Phuc, Vinapco’s managing director, said the problem of aviation debts is widespread due to lack of preparation and undue optimism in the market.

“Aviation authorities should examine carriers’ financial capacity carefully before issuing licences, otherwise we will become their reluctant creditors.”