Indochina Airlines explain on debts

The Civil Aviation Administration of Vietnam (CAAV) has released a document, requiring the private air carrier Indochina Airlines to come clean about its debts or face losing its license.
As required by CAAV, Indochina Airlines will have to report on measures to settle debts including its legal capital increase plan and finance arrangement plan.
If CAAV discovers that the airline cannot meet the requirements the airline will lose the right to provide flights from January 1, 2010.
Indochina Airlines reportedly owes 18 billion dong worth of fuel to the Vietnam Air Petrol Company (Vinapco).
This is the second time in a month that CAAV has expressed its concern over the financial situation of the fledgling airline. In mid September the management agency also warned that the airline would lose its license if it failed to pay debts and prove its financial capability.
Prior to that, in a notice delivered in late September 2009, Indochina Airlines affirmed that its operation was still on track.
Regarding the debts, Indochina Airlines says it has negotiated with partners on a payment method, and the airline will make payments from now until the end of 2009.
The airlines’ board of directors has agreed to increase its capital by 150 billion dong which will hopefully ensure its financial capability for business in 2009-2010.
General director of Indochina Airlines Ha Hung Dung told Vietnamese paper VnExpress that the founders of Indochina Airlines had anticipated the difficulties they are now facing.
“We have been determined to do everything to succeed,” Dung said.
Dung, who is also a well known musician in Vietnam, said he has done a lot of jobs, but he really has a passion for running airlines.
Over ten years ago, when Dung was the assistant to the then Prime Minister Vo Van Kiet, he once tried to seek permission for a private airline. However he had to wait till 2008 for his dream to come true.
Indochina Airline launched its first commercial flight on November 25, 2008. It is now using one aircraft, a Boeing 737-800 with 162 economy seats and 12 business seats.
Another Boeing 737-800 is expected to be put into use on October 22. The airline said it is considering raising the flight frequency on HCM City-Hanoi-HCM City to four flights per day and considering resuming the HCM City-Da Nang route which it stopped flying in late August.