Vietnamese flag carrier Vietnam Airlines is working on an exercise to divest 49 per cent stake in Cambodia’s Angkor Air to offset the impact on its operation by the COVID-19 pandemic.
Vietnam Airlines acquired a 49 per cent interest in the Cambodian peer in 2009. The local government owns the remaining 51 per cent in Angkor Air.
Vietnam Airlines said in its 2019 financial statement that the state had approved the planned disposal earlier this year.
“As at the date of issuing this financial statement [April 10], the company’s operation has been adversely impacted by the unpredictable development of the pandemic. The management has come up with short- and long-term solutions to cope with the uncertainties,” the Vietnamese firm said.
In October 2019, Airline Business reported that Vietnam Airlines had considered “whether to reduce or withdraw” its stake in Angkor Air due to stiff competition in the Cambodian aviation market.
Vietnam Airlines added that it was also planning a sale of five Airbus aircraft for $37 million, which was slated to complete by June 2020.
The Vietnamese national carrier reported a net profit of 2.54 trillion dong ($109 million) in 2019 but has suffered a loss of 2.4 trillion dong in the past quarter. Vietnam’s committee of state capital in enterprises has said that Vietnam Airlines is the most impacted business amongst the 19 companies it manages.
The local government has an 86.2 per cent interest in Vietnam Airlines, while Japan’s ANA Holding holds another 8.77 per cent. Vietnam had earlier planned to reduce its ownership to 51 per cent by 2020. Foreign investors are allowed to own up to 30 per cent in the local aviation business.
Vietnamese carriers have entered into an air pocket following the COVID-19 pandemic. Vietnam Airlines’ share price has fallen around 30 per cent in the past three months while Vietjet has seen its stock declining 21.2 per cent in the same period, and Bamboo Airways owes the Aviation Corporation of Vietnam 205 billion dong for airport services. Meanwhile, Vietnamese conglomerate Vingroup has said to withdraw from the airline business.