Viva Macau bankruptcy hits 900 creditors in Vietnam

HCMC - Global distribution system firm GDS, the former general sales agent of Viva Macau in Vietnam, said Viva Macau’s bankruptcy had affected at least 900 local creditors.

Viva Macau still owes over US$150,000 to GDS, booking agents, travel agencies and passengers in Vietnam, according to GDS. However, the airline’s combined debt in Vietnam could reach around US$1 million if the unpaid bills of local service providers were included.

The company told the Daily on Thursday that there was little chance of the budget airline settling the debt.

GDS said it would continue to track new developments of the Viva Macau case, but noted Viva Macau leased almost assets from offices to aircraft as reported by the bankruptcy management agency under the court of Macau.

Viva Macau reportedly owes some US$38 million to 1,983 creditors including the Macau government, aircraft leasing and service companies, its staff, general sales agents, booking agents, travel firms and passengers in and outside the Chinese territory.

The court of Macao will consider petitions from creditors and decide who will be prioritized to get compensation after the court allowed Viva Macau to go bankrupt at the first two-day hearing in Macau last month because the carrier was unable to resume services.

Viva Macau started to fly to Tan Son Nhat Airport in December 2007 and Noi Bai Airport in early 2009. The carrier operated daily service to Tan Son Nhat and three weekly flights to Noi Bai before it had to call off its flights to Hanoi on March 27 and HCMC a day later.

In Vietnam, Indochina Airlines faces legal action from booking agents after the Civil Aviation Administration of Vietnam (CAAV) said this agency did not know how to contact the private airline to tell it to pay deposit debts for over 30 agents.

An official of CAAV told the Daily that he had once attempted to phone Ha Hung Dung, chief executive officer of Indochina Airlines, informing him of the agents’ calls for debt payment and order this carrier to send a report on how to settle debt, but Dung did not answer the call.

CAAV also received back a document it sent to the address of Indochina Airlines in its business license to inform the carrier of the agents’ request for their deposit payment. In addition to agents, the carrier has not paid tens of billions of dong to jet fuel and service providers, including Vietnam Air Petrol Co.

Related Articles

• Amid a flood of mall space, retail hits the skids
• Vietnam Air accepts web check-in for int’l flights
• Government vows to bail out insolvent shipbuilder Vinashin
• Ford rewards employee’s technician skills in contest
• Ex-official tried for accepting bribes from Japanese firm

CAAV cannot force Indochina Airlines to pay off debts

Passengers pass by the emptied ticketing counter of Indochina Airlines at the domestic terminal of Tan Son Nhat Airport on Sunday. The fate of this carrier remains undecided though it has suspended services for almost 10 months - Photo: Mong Binh

HCMC – The Civil Aviation Administration of Vietnam (CAAV) has confirmed that it cannot force Indochina Airlines to pay off debts totaling tens of billions of dong for ticketing agents and service providers as this is a matter between the airline and its creditors.

However, CAAV will help the creditors with the steps to get their money back from the airline that has suspended services for almost 10 months because of financial woes, said Vo Huy Cuong, head of CAAV’s Air Transport Department.

Cuong explained that CAAV would only be able to inform Indochina Airlines of what the creditors requested for debt payment when the authority got the appeal from ticketing agents as the authority was not involved in the contracts signed by the first operational private carrier and the agents.

Cuong told the Daily on the phone that relevant regulations already in effect from 2006 clarified companies were not required to register with CAAV when they wanted to act as agents for a local airline. So, the agents should negotiate directly with the carrier and then take legal actions if talks between them do not bring about any good results.

Cuong said what CAAV would do in the case of Indochina Airlines was similar to the moves of Macau’s aviation regulator after the latter received CAAV’s document about the money that Viva Macau owed to ticketing agents and service providers in Vietnam. In its written reply, the foreign agency said it had told Viva Macau about its responsibility to settle debts but stressed payment would depend on legal procedures in Macau.

Viva Macau suddenly suspended its services to HCMC and Hanoi in late March this year, and has not paid money back for the already booked tickets and deposits of travel agencies, ticketing agents and passengers in Vietnam.

Viva Macau is said to owe more than US$100,000 to travel agencies, ticketing agents and passengers in this country. But, the total debts of this low-cost carrier in Vietnam are much bigger if unpaid bills of airport service providers are also calculated.

Cuong said CAAV did not know the exact debts of Indochina Airlines but put the combined amount at tens of billions of dong, with the biggest parts attributed to the jet fuel supplied by Vietnam Air Petrol Co. (Vinapco) and services providers at Tan Son Nhat Airport.

Tran Huu Phuc, director of Vinapco, said Indochina Airlines had not paid off any of the around VND20 billion (more than US$1 million) worth of jet fuel.

Phuc said Vinapco was waiting for instruction of the parent company, Vietnam Airlines Corp. and observing moves of airport services suppliers before preparing legal procedures against Indochina Airlines.

Cuong said Indochina Airlines would have been grounded for one year this October and thus having its license revoked according to the country’s civil aviation regulations.

The Ministry of Transport has not decided the fate of Indochina Airlines though Cuong said CAAV had reported the actual situation of this airline to the ministry months ago.

Related Articles

• Naval forces boost global co-operation
• PM lauds police for keeping public order
• PM sets agenda for insolvent shipbuilder
• Regulations require toys to display safety stamps
• Vietnam Air accepts web check-in for int’l flights

Bankrupt airline’s Vietnam agent to meet creditors

The Macau Supreme Court has ordered Global Distribution System Co Ltd, Viva Macau Airlines’ general sales agent in Vietnam, to attend a two-day meeting with the bankrupt carrier’s creditors next month.

But GDS, a subsidiary of TransViet Co, said the carrier may be unable to pay the $130,000 it owes travel firms, ticket agents, and passengers since it does not have enough assets to cover the amount, Nguyen Hai, chairman of TransViet Co, warned.

GDS has compiled a list of creditors and submitted to the Consumer Council and the Court of First Instance in Macau.

The budget airline’s services to Hanoi and Ho Chi Minh City were suspended March 27 when the Macau government withdrew its license for its failure to pay fuel bills of nearly 200 million patacas (US$25 million).

The Macau Consumer Council said 2,039 passengers had filed complaints as of May 18, seeking $783,000.

Of them 714 are from Macau, with the rest being from mainland China, Hong Kong, Singapore, Vietnam, Indonesia, South Korea, Japan, the Philippines, Australia, France, Germany, and the US.

Viva Macau began flying to HCMC three years ago and to Hanoi in February 2009.

Related Articles

• ASEAN's socio-cultural issues promoted at Da Nang meeting
• ASEAN senior economics officials meet in Da Nang
• Overseas Vietnamese Association in Switzerland meets
• HCMC urges efforts to save Dong Nai River
• Vietnam Air accepts web check-in for int’l flights