Leaders of the Civil Aviation Authority expressed their views on handling the debts of airlines with ACV.

Vietnam Airports Corporation - ACV and domestic airlines are recommended to continue to proactively and actively negotiate and reach agreements to agree on a plan to handle long-standing debts.

As of December 31, 2023, Vietnam Airports Corporation - JSC (ACV) had to set aside a provision for short-term doubtful receivables from domestic airlines of up to VND 3,600 billion.

The Civil Aviation Authority of Vietnam has just announced the conclusion of Deputy Director Do Hong Cam at the meeting in mid-March 2024 to handle ACV's proposal regarding the debt and debt repayment situation of Vietnamese airlines.

This meeting was attended by representatives of creditors ACV and airlines including: Vietnam Airlines, Vietjet, Bamboo Airways, Pacific Airlines and Vietravel Airlines.

According to Mr. Do Hong Cam, the aviation industry has shown signs of improvement in recent times, however, difficulties and problems remain challenges to the recovery of the entire industry. The Civil Aviation Authority of Vietnam highly appreciates and recommends that businesses in the industry continue to make greater efforts, proactively coordinate and support each other, for the purpose of maintaining and developing operations.

Regarding debts between ACV and Vietnamese airlines, the leader of the Civil Aviation Authority of Vietnam said that this is an issue subject to the provisions of contracts and current commercial and civil laws.

In the context of the difficult financial situation, the Civil Aviation Authority of Vietnam acknowledges the efforts of Vietnamese airlines in arranging to pay off debts and finding financial sources to pay ACV in the past time, thereby reducing the accumulated debt of Vietnamese airlines to ACV.

To resolve disagreements and handle outstanding debt payment obligations, the Civil Aviation Authority of Vietnam requests ACV and Vietnamese airlines to continue to proactively and actively negotiate and reach agreements to agree on a settlement plan based on risk and benefit sharing, ensuring harmony of rights and obligations of the parties involved; in which, encourage the parties to implement the debt suspension plan, extend the old debt repayment schedule and not create new overdue debts, while prioritizing the payment of amounts collected by ACV on behalf of the State, ensuring compliance with legal regulations.

The leaders of the Civil Aviation Authority of Vietnam requested ACV to consider implementing recommendations related to the operation of airlines in the spirit of goodwill and cooperation between businesses; accompanying and sharing benefits as well as risks; having the same vision and goal of overcoming difficulties to survive and develop.

In addition, Mr. Do Hong Cam assigned relevant functional departments of the Civil Aviation Authority of Vietnam to continue to be proactive and handle the matter according to their authority, while also researching and proposing policy mechanisms, reporting to the Ministry of Transport and the Government for consideration and promulgation of appropriate policies to remove difficulties and obstacles to support and facilitate the operations of businesses in the aviation industry.

Previously, at the end of February 2024, ACV sent a document to State management agencies reporting on a number of tasks that need to be implemented to recover debts of domestic airlines that are violating payment obligations to ACV.

ACV leaders said that in 2023, despite stepping up debt collection, debt collection results and debt repayment plans of airlines still did not meet requirements, requiring service providers to apply more drastic measures to move towards implementing sanctions against airlines that violate contracts.

ACV has established a 10-step process for filing a lawsuit against airlines that violate payment obligations, with the final step being to submit a lawsuit to a competent people's court.

ACV also established 5 criteria for initiating a lawsuit and stopping the provision of services to violating airlines to seek opinions from competent management agencies, including: no debt repayment plan for ACV; failure to properly implement the committed debt repayment plan; business results are not at a loss but debt is not paid; new debt arises in 2023; and debt balance is larger than other airlines.

It is known that the aviation services that ACV is providing to airlines include: take-off and landing services; passenger services; passenger and baggage security screening; cargo security screening; passenger check-in counter rental...

By the end of 2023, ACV had to set aside nearly VND3,600 billion in provisions for short-term doubtful receivables from domestic airlines, accounting for 40% of customer receivables. Of which, the majority of debts from airlines arose during the Covid-19 pandemic.

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