Vietnam’s National Assembly approved an extension for Vietnam Airlines’ 4 trillion dong ($157 million) state-backed loans through July 2027 to give the financially struggling national carrier time to reorganize its operations, according to information from the parliament.

The airline was at risk of insolvency without the extension, according to a statement earlier this week on the National Assembly’s website. The carrier had yet to complete refinancing efforts, such as restructuring non-core investments and sales of new shares, due to delays in regulatory approvals, according to the statement.

Parliament ordered the Commission for the Management of State Capital at Enterprises, relevant authorities and Vietnam Airlines “to work on a comprehensive development strategy and soon finalize measures to deal with the carrier’s difficulties so that it can recover and restructure,” the legislature’s Chief Administrator Bui Van Cuong told delegates at the closing session Saturday. 

The national carrier struggled through the COVID-19 pandemic, which “had much more complicated impact and lasted longer than forecast, causing extremely severe consequences for the airline,” the government said in a statement on the parliament’s website. 

Vietnam Airlines received 4 trillion dong in low-cost loans from commercial banks that were refinanced at 0% interest by the central bank in 2021. 

The national carrier is targeting after-tax profit of 4.2 trillion dong this year after trimming its loss by half in 2023, according to an emailed statement from the airline. The company reported a net loss of 10.4 trillion dong in 2022. 

In December 2023, the airline said cumulative losses over three straight years totaled more than 35 trillion dong, newspaper Tuoi Tre reported. 

The company will focus on restructuring its assets, capital, investment portfolio and organizational structure as well as corporate governance reforms, Chairman Dang Ngoc Hoa said in an emailed statement June 24.