Vietnamese carrier Pacific Airlines said on Tuesday that it had successfully convinced its aircraft lessors to wipe off US$220 million of its debt.

The airline reported to the Civil Aviation Authority of Vietnam (CAAV) that it had returned all of its leased aircraft and had its debt canceled, according to a Tuoi Tre (Youth) newspaper source.

Pacific Airlines expected to attract new investors to get involved in its restructuring plan.

During its ongoing temporary suspension, the air carrier will complete procedures to lease three aircraft from national flag carrier Vietnam Airlines to meet the minimum requirement for an airline to keep its license and return unused landing and take-off slots.

The airline suggested that the CAAV guide it through restructuring processes and create favorable conditions for its continued operation.

It began temporarily suspending operations on Monday.

A Pacific Airlines representative said that the airline’s flights would be rescheduled or canceled.

Passengers who have made bookings will have their reservations transferred to Vietnam Airlines flights instead. 

The return of Pacific Airlines’ leased aircraft was attributed to the air carrier’s large overdue debts.

Pacific Airlines was established in 1991 as Vietnam’s first low-cost air carrier.

In 2007, Australian airline Qantas acquired a 30-percent stake in Pacific Airlines and renamed it Jetstar Pacific Airlines.

Vietnam's State Capital Investment Corporation transferred 68 percent of its holding at Jetstar Pacific Airlines to Vietnam Airlines in 2012 and its name was returned to Pacific Airlines.

As Qantas gave all of its 30-percent stake in the budget carrier as a gift to Vietnam Airlines in October 2020, the latter holds a nearly 99 percent stake in the airline.

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