Vietnam Airlines Records $430 Million Loss On The Back Of Surging Fuel Costs

Vietnam Airlines started 2023 with a report that the airline lost VND10.09 trillion ($430 million) in 2022, blaming rising fuel prices and foreign exchange volatility. The airline reported that overall expenses were 3.6 times higher than the period in 2021. 2022 saw Vietnam Airlines reach 70% of pre-pandemic revenues compared to 2019.

The airline’s balance sheet states that Vietnam Airlines’ short-term liquidity pressure is getting larger. Concluding 2022, the national airline held VND 12.3 billion ($5.2 million) in short-term assets, including VND 3,400 billion ($1.45 million) in cash liquidity. Short-term debt totaled VND 53,000 billion ($2.26 billion), including short-term financial lease debt at VND 17,600 billion ($750 million).

Vietnam Airlines served over 18 million passengers in 2022, a considerable improvement from the past two years. As noted above, the Southeast Asian carrier hit almost three-quarters of its annual revenue compared to 2019 as its recovery continues.

Photo: Vietnam Airlines

Recovering from the pandemic and global economic pressures.

Vietnam Airlines racked up vast losses of nearly $1 billion over the first two years of the pandemic.

Entering 2023, Vietnam Airlines warns that its operations will continue to be affected by the Russia-Ukraine conflict, inflation, rising fuel prices, and the risk of an economic recession. It will focus on corporate restructuring, improving operational efficiency, and increasing labor productivity to narrow its losses further.

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(Festival of the first day)

One of the most critical dates in the Vietnamese calendar is a celebration of the arrival of Spring, commonly known as the ‘Lunar New Year.’ At times this is celebrated on a different date to the Chinese. Over this time, Vietnamese usually travel to be with family, celebrating with food and worship. This year Tết Nguyên Đán is observed on Sunday, January 22.

Vietnam Airlines has scheduled an extra 108 flights, adding 20,000 seats across its network. The majority of additional flights operated from:

• Ho Chi Minh City, Tan Son Nhat International Airport (SGN)
• Hanoi Nội Bài International Airport (HAN)

To:

• Vinh International Airport (VII)
• Thanh Hoa Thọ Xuân Airport (THD)
• Hai Phong Catbi International Airport (HPH)
• Da Nang International Airport (DAD)
• Hue Phu Bai International Airport (HUI)

From January to February 5, Vietnam Airlines will offer 9,200 flights, with 1.9 million seats available.

Other Vietnamese domestic airlines, such as VietJet, Bamboo Airways, and Vietravel Airlines, have also ramped up capacity. As of January 12, the Civil Aviation Authority of Vietnam advised that 90% of capacity from Ho Chi Minh City was already booked.

Photo: Airbus

Reconnecting with China and Hong Kong

As travel restrictions thaw throughout Asia, Vietnam Airlines has started reintroducing services to neighboring countries. In December, the airline relaunched multiple connections back to China, including Ho Chi Minh City and Hanoi to Guangzhou Baiyun International (CAN) and Hanoi to Shanghai Pudong International (PVG).

Hong Kong is also back onboard, with flights from Hanoi to Hong Kong relaunching on December 11.

Sources: Zing News, Retailnews.Asia