CAAV cannot force Indochina Airlines to pay off debts

The Civil Aviation Administration of Vietnam (CAAV) has confirmed that it cannot force Indochina Airlines to pay off debts totaling tens of billions of dong for ticketing agents and service providers as this is a matter between the airline and its creditors.

However, CAAV will help the creditors with the steps to get their money back from the airline that has suspended services for almost 10 months because of financial woes, said Vo Huy Cuong, head of CAAV’s Air Transport Department.

Cuong explained that CAAV would only be able to inform Indochina Airlines of what the creditors requested for debt payment when the authority got the appeal from ticketing agents as the authority was not involved in the contracts signed by the first operational private carrier and the agents.

Cuong told the Daily on the phone that relevant regulations already in effect from 2006 clarified companies were not required to register with CAAV when they wanted to act as agents for a local airline. So, the agents should negotiate directly with the carrier and then take legal actions if talks between them do not bring about any good results.

Cuong said what CAAV would do in the case of Indochina Airlines was similar to the moves of Macau’s aviation regulator after the latter received CAAV’s document about the money that Viva Macau owed to ticketing agents and service providers in Vietnam. In its written reply, the foreign agency said it had told Viva Macau about its responsibility to settle debts but stressed payment would depend on legal procedures in Macau.

Viva Macau suddenly suspended its services to HCMC and Hanoi in late March this year, and has not paid money back for the already booked tickets and deposits of travel agencies, ticketing agents and passengers in Vietnam.

Viva Macau is said to owe more than US$100,000 to travel agencies, ticketing agents and passengers in this country. But, the total debts of this low-cost carrier in Vietnam are much bigger if unpaid bills of airport service providers are also calculated.

Cuong said CAAV did not know the exact debts of Indochina Airlines but put the combined amount at tens of billions of dong, with the biggest parts attributed to the jet fuel supplied by Vietnam Air Petrol Co. (Vinapco) and services providers at Tan Son Nhat Airport.

Tran Huu Phuc, director of Vinapco, said Indochina Airlines had not paid off any of the around VND20 billion (more than US$1 million) worth of jet fuel.

Phuc said Vinapco was waiting for instruction of the parent company, Vietnam Airlines Corp. and observing moves of airport services suppliers before preparing legal procedures against Indochina Airlines.

Cuong said Indochina Airlines would have been grounded for one year this October and thus having its license revoked according to the country’s civil aviation regulations.

The Ministry of Transport has not decided the fate of Indochina Airlines though Cuong said CAAV had reported the actual situation of this airline to the ministry months ago.- VietNamNet/SGT

Tags: Indochina Airlines, Vietnam aviation, Vietnam aviation industry, Vietnam aviation market