Air Mekong the private Vietnamese airline, has temporarily halted flights in order to work out a more efficient business strategy, said Doan Quoc Viet, Chairman of BIM Group which owns the carrier.

Mr. Doan Quoc Viet

Air Mekong has received approval from the Civil Aviation Administration of Vietnam for the halt beginning February 28. Some news sources have released reports regarding Air Mekong’s debts, which are believed to be among causes of the halt. Every day Air Mekong spends VND1.3 billion (USD61,900) on petrol. Recently they have failed to make their payments, causing Vietnam Air Petrol to pursue the debts.

According to Viet, over the past two years, Air Mekong has conducted around 25,000 flights, with more than 1.6 million passengers. and maintained a flight occupancy rate of around 82%. Despite high revenues, roughly VND80-100 billion (USD3.8-4.76 million) per month, the airlines still incurred losses as a result of high costs.

Air Mekong had to replace its current Bombardier aircraft with another type which they hope will be more suitable for the Vietnamese market. This move is expected to help control costs. The chairman noted that they would use the halt to work out a better business strategy, rejecting rumors that the company was going out of business or that their monthly losses had reached VND30 billion (USD1.42 million).

"I'm not at liberty at the moment to disclose which type of aircraft we will use in the future, but I can assure you that we will return to the market with a more sustainable development strategy and better service," he said.

He added that they have retained a portion of their staff, and that the halt in operations had been six months in planning.

The chairman emphasised that BIM Group, which operates in real estate, seafood and some other areas, had a good financial year in 2012.