Four passengers are seen on a bus going from Hanoi to Hai Phong City
as it prepares to leave the station. Photo by VnExpress/Anh Duy. 

The fourth wave of Covid-19 has devastated the transport industry with many companies on the verge of bankruptcy amid mounting debts. 

Two or three passengers per trip is all transport company X.E Vietnam has had in recent months on its service from Hanoi to the northern province of Thai Binh.

The cost of a trip for the company is nearly VND800,000 ($35), but revenues have been only half that.

Le Ngoc Nam, CEO of the company, said revenues have been plummeting in the last six months.

Last year it posted a loss of VND30 billion, and in the first six months of this year the figure has been VND20 billion.

It has borrowed from six banks, and has sold 40 vehicles and mortgaged other assets.

"The fourth wave of Covid-19 has devastated us," Nam said. "We have thought of filing for bankruptcy but we don’t want to give up a brand we have built for 15 years."

Dozens of X.E Vietnam vans are left unused at a parking lot due to low
demand amid the Covid-19 pandemic. Photo by VnExpress/Anh Duy.

Another transport firm, Minh Thanh Phat, is in similar difficulties with revenues from each trip between Hanoi and the border province of Lao Cai being a quarter of the cost of VND8 million,.

CEO Do Van Bang said: "If we don’t keep the buses running we will lose our slots at the stations. We lose VND8-10 billion every month just to keep operations going."

He cannot sell buses as there is little demand for them amid the pandemic. Without any reserves left, he plans to use them as collateral to borrow from banks.

"In the next few months many transport companies will file for bankruptcy, workers lose their jobs and banks will be affected by bad debts."

The situation is sector-wide.

In the last six months revenues on regular routes fell 70-80 percent from pre-pandemic levels, according to the Vietnam Automobile Transportation Association (VATA).

The corresponding declines are 90 percent for chauffeur services, 70 percent for taxis and 30 percent for public buses, it said.

"Government agencies should issue more specific regulations so that banks do not create more difficulties for businesses," VATA chairman Nguyen Van Quyen said.

But banks have done what they could, officials said.

The general secretary of the Vietnam Banks Association, Nguyen Quoc Hung, said lenders could not give new loans to businesses that have not fully repaid their debts.

Banks are also businesses, and have been doing what they can to restructure debts and lower or waive interest for struggling borrowers, he added.

Banking industry insiders said some customers have taken advantage of Covid-19 to evade repayment, and so banks have to use various methods to identify those who actually need support.

Quyen said the passenger transport sector needs special incentives from the government such as scrapping of value-added tax this year and low-interest loans to survive the pandemic.