Vietnam Airlines reports record profit, ending four years of losses

A Vietnam Airlines aircraft at Da Nang international airport. (Photo: VNA)

HCM City - Vietnam Airlines is set to achieve a record pre-tax profit of 7.32 trillion VND (287.7 million USD) in 2024, ending four years of losses, with revenue expected to reach 114.7 trillion VND (4.5 billion USD), up 23% from last year.

Speaking at a recent conference, Le Hong Ha, CEO of Vietnam Airlines, said that the projected profit for 2024 is expected to more than double that of the airline’s peak years in 2018 and 2019.

Ha did not disclose the factors that contributed to this anticipated record profit.

Vietnam Airlines is implementing flexible transport capacity management, cost optimisation, and discount negotiations while leveraging international travel growth for recovery, according to a press release by Vietnam Airlines.

Despite a recovery in the aviation market, Vietnam Airlines faced significant challenges due to COVID-19 restrictions and reported an accumulated loss of over 35 trillion VND as of September.

By the end of 2023, the airline’s negative equity reached around 17 trillion VND, primarily due to political instability in some markets, exchange rate fluctuations, and rising operational costs, experts noted.

Factors such as political uncertainty, volatile exchange rates, and increased expenses for fuel, maintenance, and aircraft leasing further impede growth in the aviation sector.

In a related move, at an upcoming extraordinary meeting, the airline plans to propose a share issuance to increase its charter capital and outline a recovery strategy extending to 2035.

Lawmakers last month approved a potential increase in the airline’s charter capital by up to 22 trillion VND (868 million USD) through new share sales to existing shareholders.

The national flag carrier is expected to transport 22.7 million passengers in 2024, up 8% from 2023. Cargo volume is projected to rise by 40% to 314,700 tonnes.

Each aircraft in the fleet is operating an average of 11 hours daily, a 25% increase.

Vietnam Airlines is primarily government-owned, with over 86% of shares held by the government and 5.62% by Japan’s ANA Holdings, according to the London Stock Exchange data./.