The government requested to transfer Skypec from Vietnam Airlines to PVN

The Government requested the State Capital Management Committee at Enterprises to handle the plan to transfer the Aviation Fuel Company (Skypec) from Vietnam Airlines to PVN.

This content was stated in the concluding announcement dated June 23rd by the Standing Committee of the Government at a working session with the State Capital Management Committee at enterprises and 19 corporations and general companies on production and business.

Specifically, the Standing Committee of the Government requested the State Capital Management Committee at Enterprises to direct Vietnam Airlines Corporation and Vietnam Oil and Gas Group (PVN) to handle the plan for transferring the Aviation Fuel Company Limited (Skypec) from Vietnam Airlines to PVN. This is a task assigned to these two corporations by the Prime Minister in September 2022.

The plan to transfer Skypec to PVN aims to support the restructuring of Vietnam Airlines and develop PVN's capacity in the petroleum production and supply chain. In case of problems arising beyond its authority, the State Capital Management Committee at Enterprises is required to report to the ministries and propose a solution, reporting to Deputy Prime Minister Le Minh Khai before July 15.

Earlier this year, Vietnam Airlines announced it was inviting consulting firms to develop and implement a plan for transferring the airline's stake in Skypec. This move is one of the airline's own efforts to partially overcome financial difficulties such as negative equity and accumulated losses of tens of trillions of dong.

Skypec tanker trucks refuel Vietnam Airlines aircraft. Photo: Skypec — Skypec tanker refuels Vietnam Airlines plane. Photo: *Skypec*

Skypec has a charter capital of VND800 billion, wholly owned by Vietnam Airlines. With a capacity of over 220,000 m3, Skypec owns a system of upstream warehouses at major seaports and airport warehouses at 18 civil airports nationwide. The company is capable of serving over 214,000 flights with a total annual output of over 2 million tons per year. Before the pandemic, Skypec was one of Vietnam Airlines' "golden goose".

This company, along with Petrolimex Aviation, is currently the two main suppliers of aviation fuel in the domestic market. In addition, the domestic aviation fuel market also includes Tan Son Nhat Petroleum Trading Joint Stock Company (Tapetco), in which Sasco holds a 38% stake, and Noi Bai Aviation Fuel Services Joint Stock Company (NAFSC). However, the supply volume of both these companies is quite low compared to the two major players mentioned above.

According to the concluding statement , the Standing Committee of the Government requested Vietnam Airlines to comply with the rules of competition, review and refine its restructuring plan, ensure efficiency, reduce costs, and prevent the continuation of the current large losses.

In 2021, the company incurred a gross loss of approximately 10 trillion VND, but last year this decreased to a loss of about 2.625 trillion VND, thanks to revenue recovering to 70% of pre-pandemic levels.

Besides Vietnam Airlines, the Government also urged the State Capital Management Committee to "not delay any longer" in approving the restructuring plans of corporations and general companies for the period 2021-2025; and the 5-year investment, development, and business production strategies of corporations and general companies in July.

The capital representative agency at State-owned enterprises also needs to promptly and thoroughly handle the recommendations of corporations and general companies and periodically report on the handling and removal of difficulties to the Government every quarter.

"The State Capital Management Committee at enterprises should be more decisive and timely, fulfilling its functions and duties as a specialized agency representing the owner to effectively handle tasks, especially investment and development of the 19 corporations and general companies," the concluding statement said.

In the first five months of the year, 19 corporations and general companies recorded a total revenue of more than VND531,200 billion, equal to 50% of the yearly plan and an increase of 3% over the same period in 2022. The corporations paid VND71,700 billion to the budget. Pre-tax profit was about VND32,200 billion, of which 1/3 of the units had increased profits compared to the same period.

Hoai Thu

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