HANOI, VIETNAMVietnam's flag carrier Vietnam Airlines is on the verge of bankruptcy, according to the country's Ministry of Planning and Investment, as losses and debts mount and air travel demand remains flat.

Notwithstanding a VND12 trillion dong (USD519 million) bailout plan approved by the Vietnamese government, the airline expects a loss of VND10 trillion (USD435 million) in the first half of 2021.

Vietnam Airlines, which is facing the threat of lawsuits because of its debts, is 86% government-owned and 8.77% by Japan’s ANA Holdings. Banks are no longer grants credit to the Asian carrier, the local media reports.

As of the end of March 31, 2021, the operator's total debts increased to VND59.55 trillion (USD2.6 billion), accounting for 98% of its total assets. It has nearly run out of cash.

Vietnamese airlines’ revenues were down 61% in 2020 on the previous year’s levels, and the situation has worsened in the first half of 2021 as the country endures the third wave of Covid-19, forcing revenues down 80% compared to the same period in 2020.

Vietnam Airlines is preparing to auction off 11 of its A321s to ease its losses, local media reported. The airline currently operates 49 A321-200s and twenty A321-200Ns, along with two A320-200Ns, fourteen A350-900s, eleven B787-9s, and four B787-10s, plus seven ATR72-500s.

Only 41 of 107 aircraft are currently active.