Jetstar hits fuel turbulence

Jetstar Pacific, the country’s second largest airline, is facing a difficulty as its fuel supply contract with Vietnam Air Petrol Company Limited ended on May 31st with the airline owning $8.3 million.
Vietnam Air Petrol Company Limited (Vinapco) yesterday announced that it would continue supplying fuel to Jetstar Pacific if the airline was guaranteed by a bank or its mother company, State Capital Investment Corporation.
Furthermore, Jetstar Pacific has to pay interest for its debt in accordance with the bank’s lending interest rate. The fuel supplier also gives a deadline on June 4th to Jetstar Pacific to find a guarantee for its $8.3 million of debt.
Tran Huu Phuc, general director of Vinapco, said if Jetstar Pacific failed to meet the deadline, the company would not sign a new contract. However, he admitted that it was hard for Vinapco to stop supplying fuel to the airline.
This is not the first time Jetstar Pacific has failed to pay fuel fees to Vinapco. Three years ago, Vinapco unilaterally stopped supplying fuel to Jetstar Pacific as the airline could not pay debt. But the government forced Vinapco to continue supplying fuel to Jetstar Pacific even though the airline had not paid all the debt. – VIR

Tags: Jetstar Pacific, Vietnam aviation, Vietnam aviation industry, Vietnam aviation market

Posted by VBN on Jun 2 2011. Filed under Aviation. You can follow any responses to this entry through the RSS 2.0. You can leave a response or trackback to this entry