Airline to resume service after new capital infusion

Indochina Airlines said it has convinced shareholders to inject more funds and will restart its service this month after several deferments.

The carrier has rented two Boeing airplanes to resume service on its Hanoi-Ho Chi Minh City and HCMCDa Nang routes on December 15, it said in a report to the Civil Aviation Administration of Vietnam.

Indochina also said its shareholders had agreed to invest another VND400 billion (US$21.6 million) to keep it going.

Before its latest suspension of operations, Indochina Airlines, which opened in November last year, was using only one airplane on the HanoiHCMC route, having closed all other services earlier this year.

After implementing what was supposed to be a one-month service suspension due to both technical and financial troubles, the carrier decided to extend it until mid December and returned the lone aircraft to its service provider.

The Civil Aviation Administration of Vietnam last month warned that it would revoke Indochina’s license if the private airline couldn’t resume service by January 1 next year. The administration said it was waiting for an official report about the firm’s financial problems, including debts of more than VND30 billion ($1.6 million) owed to service providers.

In the report to the administration, which was published by local media Tuesday, Indochina said it had reached agreements with the providers and would gradually clear the debts by the end of this month.

Chairman Ha Dung was quoted by local news website VietnamNet as saying that Indochina would try to maintain business at all costs as it doesn’t want to lose all its investments so far, which he valued at VND370 billion.

Under national regulations, private airlines with less than 10 aircraft need to have a registered capital of just VND200 billion.

VNN/Thanh Nien

Tags: Vietnam aviation