Vietnam Airlines (VN, Hanoi) has said it will ask the Vietnamese government for a loan of between VND4-12 trillion dong (USD172-515 million) to solve short-term cash-flow problems. Otherwise, it could run out of money in the coming weeks, local media reported.

The flag carrier's coffers could be empty by August, after which it could fall into a "really bad" situation, Tran Thanh Hien, the carrier's finance director, revealed at a forum on June 12.

"We are not asking for an investment, we will pay back this sum," Hien insisted.

Vietnam Airlines also plans to drum up capital by issuing more shares to existing shareholders, he said, but this could take five to six months.

The government currently owns an 86.1% stake in the carrier, though it has said it plans to reduce its ownership to 51%. The airline anticipates a loss of VND15-16 trillion (USD644-687 million) this year, Hien said.

The fleet was grounded from late March to late April, but the carrier still faced some airport and maintenance fees as well as almost VND4.4 trillion (USD189 million) in refunds. It has done all it can to cut costs by VND4.5 trillion (USD193 million), including reducing salaries and asking staff to go on unpaid leave, according to the director.

As Hien put it, "it's like a healthy person having aortic rupture," the business news site VietnamBiz reported.

The State Capital Investment Corporation, Vietnam's national wealth fund, recently expressed interest in pouring trillions of dong into Vietnam Airlines to restructure the company, according to the online newspaper VnExpress.

Despite its ongoing cash crunch, on June 15, Vietnam Airlines has been linked to acquiring ENT! QANT's stake in Jetstar Pacific (BL, Ho Chi Minh City) and will change the low-cost carrier's name to Pacific Airlines (BL, Ho Chi Minh City), restructure it, and synchronise its booking system with its parent. Vietnam Airlines currently owns a 68.85% stake in Jetstar Pacific.

The financial situation facing Jetstar Pacific is an increasingly serious imbalance due to accumulated losses of trillions of dong from previous years, Hien had said on June 12 according to the Saigon Times.

Having slowly begun to resume domestic operations from late April, Vietnam Airlines now plans to start reopening international flights from July 2, it revealed on June 11.