Vinapco unsure of next step with Jetstar debt

Vietnam Air Petrol Company (Vinapco) insists it will continue to supply Jetstar Pacific Airlines Joint Stock Aviation Company with fuel despite the budget carrier still owing Vinapco VND173 billion.

Vinapco, a subsidiary of national flag carrier Vietnam Airlines, requested the debt from Jetstar and threatened to cut off fuel for the airline if it didn’t receive the money by May 20. The request was also sent to relevant government agencies.

However, Tran Huu Phuc, director of Vinapco, told the Daily on the phone on Tuesday that the company is still providing fuel for Jetstar. Vinapco has found it hard to act on its threat after the deadline passed as it is a jet fuel supply monopoly.

Vinapco fears it will infringe competition law if it refuses to supply Jetstar with fuel.

The Vietnam Competition Authority said the debt collection should be solved based on payment terms in the contract between Vinapco and Jetstar.

If conciliation failed, the case could be brought to court. An official from the authority said on condition of anonymity that the agency had received details from Vinapco, relating to debt collection.

However, court-related legal proceedings are time-consuming and costly while the jet fuel supply is still continued, Phuc said.

Vinapco went to court over a VND20 billion debt from Vietnamese private carrier Indochina Airlines. The company has still to receive payments from the carrier despite filing a lawsuit.

A representative from Jetstar said the carrier suggested extending the debt payment period to the end of next month with interest.

The debt is actually not that big compared to the amount of jet fuel it buys from Vinapco. “In business, an enterprise sometimes meets some difficulties. It’s not something really big,” said the representative.

In January 2008, Vinapco stopped providing Pacific Airlines, or the present-day Jetstar Pacific Airlines, with fuel because the local carrier failed to agree on a jet fuel price suggested by the supplier. Vinapco was fined more than VND3 billion as the move violated competition law. – SGT

Tags: Jetstar, Vinapco