A Vietjet aircraft prepares to land at Tan Son Nhat International Airport in Ho Chi Minh City in June 2020. Photo by VnExpress/Quynh Tran.
Budget airline Vietjet is set to receive VND2 trillion ($86.6 million) via sale and leaseback deals on four or five aircraft this year, helping reduce its Covid-impact losses.
The airline is set to receive another three aircraft in the first quarter of 2021 as part of its plan to purchase around 10 jets over the next two or three years, according to a report by top brokerage firm SSI Securities Corporation.
Sales and leaseback is a transaction in which the owner sells a property and immediately rents it from the buyer. Such transactions are often used by airlines to raise needed capital and still be able to operate the aircraft. In essence, the deal is a loan on which interest is paid as leasing fees.
The SSI report said the cash received thus could help reduce some losses for Vietjet, which has suffered major Covid-19 impacts this year because of widespread restrictions on international flights.
Vietjet posted a pre-tax profit loss of VND2.6 trillion in the first nine months, with revenues falling 63 percent year-on-year to VND13.8 trillion. In this period, the number of flights it operated fell 43 percent year-on-year to 58,261.
The airline has recently proposed that the government allows it and other airlines to receive low-interest loans of VND4 trillion each to help pay their debts. Vietjet would return the money with interest in 2023-2025, a corporate leader said.
The company has also proposed that its debt repayments due this year are deferred until the end of next year, and that carriers are given a 3 percent reduction in interest rates on their loans.