The Civil Aviation Authority of Vietnam has sent an official dispatch to Pacific Airlines advising and requesting a report on meeting the conditions for an air transport business license before August 10. The reason is that this company had negative capital and couldn’t maintain the minimum capital under Decree 89.
However, in the audited Financial Statements of Pacific Airlines in 2020 and 2021, the airline's equity was negative 2,275 billion and negative 4,583 billion VND, respectively. Thus, for 2 consecutive years, Pacific Airlines did not meet the capital requirements. If the minimum capital is not maintained for 3 consecutive years, the air transport business license will be canceled.
The Civil Aviation Administration of Vietnam required Pacific Airlines to provide information on ensuring security and safety by regulations of aviation authorities; a dealing plan paying debts for partners (ACV, VATM...), and the business restructuring plan.
Pacific Airlines established in 1991, is the first state-owned low-cost airline in Vietnam. Currently, this airline is a subsidiary of Vietnam Airlines when the national airline owns 98% of the shares in Pacific Airlines.
In the past decade, Pacific Airlines only reported a profit in 4 years, including 2014 - 2015 and 2018 - 2019, the highest profit was just over 100 billion VND.
After reporting a record loss in 2016, Pacific Airlines' business results from nearly 5,000 billion VND in revenue increased to nearly 6,900 billion VND in 2017 and peaked in the 2018 - 2019 period with a scale of 8,000 - 9,000 billion VND per year.
However, the Covid-19 pandemic blew away all of the airline's achievements. Pacific Airlines has continued to record losses. From more than 8,400 billion VND in 2019, the revenue has plummeted to 2,600 billion VND - the highest loss since its establishment. However, by 2021, Pacific Airlines recorded a loss of more than 2,300 billion VND.
Discussing the situation of this low-cost airline, Mr. Le Hong Ha, General Director of Vietnam Airlines said: there is an item to restructure Pacific Airlines in the plan of Vietnam Airlines and they still have been looking for shareholders capable of both finance and operation to go with Vietnam Airlines in creating more resources for Pacific Airlines. Concurrently, he also emphasized: "Vietnam Airlines needs Pacific Airlines to exploit customers who want to take cheap flights." Vietnam Airlines has received positive information from 3 investors interested in Pacific Airlines. Currently, Vietnam Airlines is conducting negotiations to reconstruct Pacific Airlines.
