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Government wants acceleration in transfer of Vietnam Airlines’ fuel distributor

Government wants acceleration in transfer of Vietnam Airlines’ fuel distributor

Monday, June 26, 2023, 12:31 GMT+7
Government wants acceleration in transfer of Vietnam Airlines’ fuel distributor
A photo of a tanker truck preparing to fuel a Vietnam Airlines aircraft. Photo: Quang Dinh / Tuoi Tre

The Vietnamese government’s standing committee has urged the Commission for the Management of State Capital at Enterprises to direct Vietnam Airlines to quickly transfer its fuel distributor Skypec to the state-run Vietnam Oil and Gas Group (PVN).

The prime minister assigned this task to the two firms in September 2022.

The transfer is aimed at restructuring the national air carrier, addressing its huge financial losses and boosting PVN’s capacity in fuel supply and production chains.

The commission was told to report any obstacle during the transfer process to the relevant ministries, competent agencies, and Deputy Prime Minister Le Minh Khai prior to July 15, according to the standing committee’s conclusion recently released by the Government Office.

In early 2023, Vietnam Airlines announced that it was looking for consulting firms to help offload its stake in Vietnam Air Petrol Company Limited (Skypec), which has a capital of VND800 billion (US$34 million).

The move was one of the airline’s efforts in easing its financial distress.

As per the conclusion, the Vietnamese government’s standing committee asked Vietnam Airlines to follow competition regulations, and review and complete its restructuring plan to ensure its operation efficiency and cut costs.

In 2021, Vietnam Airlines reported an accumulated loss of some VND10 trillion ($425.5 million), but the loss shrank to nearly VND2.625 trillion ($111.8 million) last year thanks to the airline’s recovery.

Skypec, wholly-owned by Vietnam Airlines, and Petrolimex Aviation are currently the two main jet fuel distributors in Vietnam.

Skypec mainly fuels Vietnam Airlines planes and the aircraft managed by dozens of international air carriers.

With its total storage capacity of over 220,000 cubic meters, Skypec runs a system of warehouses at major seaports and 18 airports nationwide.

The fuel distributor can fuel more than 214,000 aircraft annually.

Before the COVID-19 pandemic broke out, Skypec was one of the biggest earners for Vietnam Airlines.

Aside from Skypec and Petrolimex Aviation, the local jet fuel supply market has Tan Son Nhat Petrol Commercial JSC and Noi Bai Aviation Fuel Service JSC.

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Tieu Bac - Ngoc An / Tuoi Tre News

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