International visitors grow, Vietnam Airlines achieves positive business results

The remarkable growth of the international passenger market has contributed to positive business results for Vietnam Airlines in the first 6 months of 2024.

Vietnam Airlines achieved consolidated revenue of more than VND 53,126 billion, up 20% over the same period in 2023. Consolidated pre-tax profit was more than VND 5,674 billion; of which, net profit from business activities was nearly VND 1,143 billion and other profit was more than VND 4,531 billion.

According to first half year financial report 2024, Vietnam Airlines Consolidated revenue reached more than VND 53,126 billion, up 20% over the same period in 2023. Consolidated profit before tax was more than VND 5,674 billion; of which, net profit from business activities was nearly VND 1,143 billion and other profit was more than VND 4,531 billion, with a huge contribution from Pacific Airlines having its debt cleared by its partners. In terms of operating results, the airline transported nearly 11.5 million passengers and 143 thousand tons of parcel cargo, up 10% and 42.1% respectively over the same period in 2023.

This is a relatively positive result in the context that the national airline is facing difficulties from high fuel prices, unfavorable exchange rate fluctuations, low seasonality in the second quarter and a shortage of aircraft due to the global engine recall by manufacturer Pratt & Whitney.

Aviation fuel prices remain high, averaging 102.14 USD/barrel, up 30.3% compared to 2019, causing Vietnam Airlines to incur nearly 2,500 billion VND in additional costs. The VND/USD exchange rate is at 24,856 VND, up 7% compared to 2019, causing the airline's costs in the first 6 months to increase by 724 billion VND. At the same time, the sharp decline in the Japanese Yen exchange rate has also caused hundreds of billions of VND in revenue losses for Vietnam Airlines in this key market.

In addition, the severe shortage of aircraft has had a major impact on Vietnam Airlines' revenue and profits. Before the pandemic, the Vietnamese aviation industry had 230 aircraft, but now there are only 160, a 32% reduction in resources due to the impact of the disruption of the global supply chain. The global shortage of aircraft increases aircraft rental prices, increases maintenance costs, aircraft spare parts, and prolongs the time aircraft are grounded, causing revenue losses.

Before the pandemic, Vietnam's aviation industry had 230 aircraft but now has only 160, a 32% reduction in resources due to the impact of the disruption of the global supply chain.

However, Vietnam Airlines has taken advantage of the growth momentum of the international market to quickly recover and develop. The total international market in the first 6 months of the year reached nearly 20 million passengers, an increase of 42% over the same period in 2023, recovering to almost the same level as before the Covid-19 pandemic. Seizing the opportunity, Vietnam Airlines has opened new routes to Manila (Philippines), Chengdu (China) and upgraded wide-body aircraft on routes to India, China, Singapore, etc. For the domestic market, Vietnam Airlines has increased night flights and implemented aviation- tourism linkage incentives to strongly stimulate domestic tourism demand.

Another important factor that has helped Vietnam Airlines’ revenue growth is that the airline has increased its efforts to attract high-revenue passengers through upgrading service quality and enhancing digital transformation. Specifically, Vietnam Airlines continues its strategy of improving service quality with improvements from the ground to the air, such as upgrading the quality of Business Lounge services, implementing a new method of escorting passengers to the aircraft gate, innovating the in-flight menu, applying the Airfi wireless entertainment system on the entire Airbus A321 fleet, diversifying entertainment programs, etc.

In the field of restructuring, Vietnam Airlines successfully reached an agreement to cancel the debt of VND 4,665 billion with Pacific Airlines, contributing significantly to the consolidated profit of the Corporation. In addition, the negotiations on payment deferral, cost reduction and flexible use of credit limits were implemented vigorously to help reduce cash flow pressure.

Not only ensuring business efficiency, Vietnam Airlines continues to promote the role of the national airline connecting Vietnam with the world and between regions across the country, thereby contributing to promoting the country's socio -economic development. The airline especially focuses on social responsibility and sustainable development through many community care activities, supporting difficult circumstances and spreading human values.

Besides, by bringing Vietnam's image to the world through aviation-tourism promotion and advertising activities, Vietnam Airlines has actively contributed to enhancing the image and position of the country and Vietnamese people in the international arena.

In the last 6 months of the year, besides some favorable factors such as the recovery of the international market, Vietnam Airlines assesses that the business environment will still have to face existing problems such as: high fuel prices, unfavorable exchange rate fluctuations, sharp increases in aircraft rental prices and declining domestic aircraft resources. In addition, new developments may appear such as: election results in some countries affecting the world's relations and development; widespread conflicts in Europe and the Middle East; competition in the international market is increasing rapidly as international airlines increase their operations to Vietnam…

To overcome difficulties and achieve its goals, Vietnam Airlines will continue to improve service quality, focus on effective implementation of operations, prepare resources well for the future and maintain safety in operations. At the same time, the airline will focus on management and cost control in all areas, as well as have plans to build and control cash flow plans.

The airline has paid special attention to implementing the restructuring project with comprehensive solutions on restructuring assets, capital sources, investment portfolio, organizational structure and corporate governance innovation to overcome the consequences of the Covid-19 pandemic, creating a foundation for sustainable development. Vietnam Airlines expects to achieve the goal of balancing revenue and expenditure in 2024 as planned at the General Meeting of Shareholders.

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