As it scrambles for ways to cut costs and secure new revenue streams, with renewed doubts cast over its ability to keep operating, Vietnam Airlines (VN, Hanoi Noi Bai International) is negotiating to cancel the delivery of four Boeing B787s and Airbus A320s and also postpone the delivery of five other new aircraft to the end of 2022 and 2023 instead of 2020-21 as originally agreed.

The troubled majority-state-owned flag carrier, which obtained a VND12 trillion dong (USD513 million) bailout last year while grappling with around VND20 trillion (USD854 million) worth of debt, has also sold one aircraft, transferred the rights to buy and lease back one engine, and liquidated its investment in Cambodia Angkor Air (K6, Siem Reap), it summarised in its latest financial statements, covering the first half of 2022. These moves earned it more than VND860 billion (USD36.8 million).

Vietnam Airlines said it was continuing to look for other sources of revenue, including further downsizing of its fleet, selling more engines, and offloading financial investments.

According to the ch-aviation fleets module, Vietnam Airlines has four aircraft due for delivery, all of them B787-10s. It already operates another four of the type as well as eleven B787-9s. The carrier does not have any orders from Airbus, and the report did not clarify which specific deliveries it had tried to cancel, but it has in the past sought to renew its narrowbody fleet through smaller dry-lease deals with lessors. However, just one month ago it issued a Request for Proposals for the dry-lease of three new-build A320-200Ns with expected delivery dates in 2022 or 2023.

In the accounts, auditing firm Deloitte Vietnam expressed doubts that Vietnam Airlines would be able to continue as a going concern, as its short-term debt exceeded short-term assets (those held for a year or less) by more than VND36.4 trillion (USD1.55 billion) as of June 30. The auditor raised similar concerns in the first-half reports for both 2020 and in 2021.

Its ability to keep operating will depend on the government’s commitment to its ongoing financial support, loan extensions at commercial banks and financial institutions, and the restructuring of payments to suppliers and lessors, Deloitte said.

Revenue was in excess of VND30 trillion (USD1.3 billion), double that for the same period last year, but because of high fuel prices and many international routes yet to resume, the carrier sustained a loss of VND5.1 trillion (USD218 million), compared to around VND2 trillion (USD86 million) for the same period last year. As of June 30, its accumulated losses amounted to VND28.9 trillion (USD1.24 billion).

The carrier did not respond to ch-aviation’s request for comment.