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Tag: Vietnam Airlines

  • Vietnam Airlines reports $430M loss on fuel price

    Vietnam Airlines reports $430M loss on fuel price

    Vietnam Airlines reported a loss of VND10.09 trillion ($430.3 million) last year and blamed it on rises in fuel prices and exchange rate volatility.

    Its revenues were worth around VND71 trillion, equivalent to 70% of revenues in 2019 before the Covid-19 pandemic hit but higher than the combined figures of 2020 and 2021.

    As of last year the carrier had accumulated losses of VND34.2 trillion.

    Yet it remains optimistic about 2023 since global markets have been recovering since late 2022 and said it would take measures to address the losses issues.

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  • Vietnam Airlines adds 108 flights for Tet

    Vietnam Airlines adds 108 flights for Tet

    Vietnam Airlines has expanded its Tet schedule for a fourth time with 108 additional flights with 20,000 seats.

    The airline said most of the flights are from HCMC and Hanoi to Vinh, Thanh Hoa, Hai Phong, Da Nang, and Hue.

    In all there will 9,200 flights with 1.9 million seats between January 1 and February 5.

    Vietnam Airlines had earlier announced three additions in August and December for Tet in late January.

    Other carriers like Vietjet, Bamboo Airways and Vietravel Airlines have also added flights.

    Data from the Civil Aviation Authority of Vietnam showed that more than 90% of seats on flights from HCMC to central and northern destinations between January 14-21 had been booked as of January 12.

    Many people from the central provinces of Thanh Hoa, Nghe An and Quang Binh work in the southern city and return to their hometown to celebrate Tet with their family.

  • Vietnam Airlines adds more flights for Tet

    Vietnam Airlines adds more flights for Tet

    Vietnam Airlines has announced it will increase the number of flights during Tet (Lunar New Year holidays) by a further 500 after informing increases in August and early December.

    The 500 flights will be between Jan. 6 and Feb. 5, 2023, and have over 90,000 seats. Most of them will be from HCMC and Hanoi to Vinh, Thanh Hoa, Dong Hoi, Chu Lai, and other places.

    Vietjet Air and Bamboo Airways have sold nearly all tickets on their Tet extra flights. Vietravel Airlines has increased the number of daily return flights between HCMC and Hanoi to three.

    Airlines will altogether operate nearly 33,700 flights with 6.7 million seats during Tet, which falls in late January, up 33% from the previous year.

    But with many people still unable to buy tickets to return home for the New Year, the Civil Aviation Authority of Vietnam and airlines are considering adding even more flights.

  • Aviation stocks rise amid expected industry recovery

    Aviation stocks rise amid expected industry recovery

    Stocks of Vietnam Airlines, Vietjet and other companies in the aviation industries have surged as the resumption of flights to China amid its relaxed Covid-19 policy boosted investors’ sentiment.

    HVN of state-owned Vietnam Airlines closed last week at a ceiling price in its third session in the green and returned to the mid-October price range of around VND11,750 ($0.50).

    Meanwhile, VJC of budget airline Vietjet, the only airline blue chip, gained 5% to close at VND111,500.

    SAS of Tan Son Nhat Airports Services and AST of Taseco Airs, which mostly provide services at Noi Bai International Airport, all gained three sessions to close at VND22,000 and VND54,000, respectively.

    These stocks gained after China relaxed its Covid-19 restrictions and several Vietnamese airlines, such as Vietnam Airlines and Bamboo Airways, announced a flight resumption to Chinese cities.

    Analysts of brokerage VNDirect said earlier this month that the most damaging factor for Vietnam’s tourism and aviation recovery is China’s zero-Covid policy which has been strictly imposed in most of the last three years.

    Chinese tourists accounted for 35% of total foreign tourists in Vietnam before the pandemic, and the figure is forecast to reach 20% in early next year before returning to the old level in early 2024, they added.

    “As the earnings of Vietnamese aviation companies have a high dependency on international traffic, we believe that their figures will surge starting next year.”

    Another reason for the surge in aviation stocks is an increasing number of investors buying the dip after the plunges.

    It also warned that risks such as high oil prices, heavy competition and weakening travel demand due to a global economic slowdown might have impact on the recovery of aviation stocks.

  • Main bourse warns Vietnam Airlines of delisting

    Main bourse warns Vietnam Airlines of delisting

    HVN of Vietnam Airlines would be delisted if the national carrier continues to report a loss or negative equity this year, the Ho Chi Minh Stock Exchange (HoSE) warned.

    The ticker is being restricted after Vietnam Airlines posted equity of negative VND2.16 trillion ($91.8 million) in Q1, and losses for the two most recent years.

    Under the current regulation, a company will have its ticker delisted if it reports losses for three consecutive years, or its accumulated losses exceed the charter capital, or its equity is negative.

    As of June 30, Vietnam Airlines’ equity was a negative VND4.9 trillion ($209 million), its liabilities exceeding assets by VND36.435 trillion and its overdue payables at more than VND14.85 trillion.

    The national carrier targeted revenues of VND45.2 trillion, and pre-tax losses of VND9.3 trillion for 2022.

    In a statement sent to the HoSE it said it would restructure its portfolio and issue shares to raise its capital.

    Last year, Vietnam Airlines avoided delisting after issuing 800 million bonus shares worth VND8 trillion.

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  • Vietnam Airlines cuts losses by nearly half

    Vietnam Airlines cuts losses by nearly half

    Vietnam Airlines managed to cut its losses by 44 percent year-on-year in the second quarter to VND2.48 trillion ($106.25 million), thanks to soaring summer travel demand.

    Its revenues nearly tripled to VND18.43 trillion, exceeding its target by 35 percent.

    This was the highest quarterly revenue since 2020 when travel was yet to be affected by Covid-19. But the high fuel prices remain a sore point for the carrier.

    At the end of June, JetA1 fuel was above US$160 per barrel, double the average price last year.

    International travel demand has not fully picked up, especially in Northeast Asian countries, which were a major source of tourists for Vietnam pre-pandemic.

    The airline also saw sales expenses double to VND660 billion.

    First half losses were down 39 percent to VND5.1 trillion.

    Its accumulated losses have climbed to VND28.9 trillion. The airline expects the summer travel season to last until the end of August and the relaxed entry restrictions in other countries to help boost its revenues.

    Vietnam Airlines and its low-cost subsidiaries Pacific Airlines and Vietnam Air Services Company together transported nearly 9.5 million passengers in the first six months, 24.6 percent higher than targeted.

    Vietnam Airlines accounted for eight million.

  • Vietnam Airlines expects financial difficulties until 2023-end

    Vietnam Airlines expects financial difficulties until 2023-end

    Vietnam Airlines expects financial difficulties to last until the end of 2023, amid aftermath of the Covid-19 pandemic.

    The flag carrier targets to be profitable and turn around its negative equity this year, it said in a filing to the Ho Chi Minh Stock Exchange, on which its stock HVN is still restricted to trading in the afternoon due to loss reports.

    The airline has recorded an accumulated loss of over VND24.5 trillion ($1.05 billion) as of March, and it wants to turn this situation around and become profitable by 2024 onward.

    It had recently sold a 35 percent stake in Cambodia Angkor Air for $35 million and will sell the remaining stake (14 percent) this year.

    It is set to issue more shares to pump up its capital in 2023 or 2024. In September last year, it raised nearly VND8 trillion by share issuance. The airline said it has been benefiting from a strong rebound in domestic travel.

    Last month, it operated nearly 12,000 flights and transported two million passengers, exceeding its plan by 42 percent.

    International travel, however, has been affected by the Russia-Ukraine crisis and rising fuel prices, the airline said.

    The Vietnamese government owns a more than 86 percent stake in Vietnam Airlines through two entities. Japan’s ANA Corporation owns a 5.6 percent stake.

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  • Vietnam Airlines posts $113 mln Q1 loss

    Vietnam Airlines posts $113 mln Q1 loss

    Vietnam Airlines remained in the red in Q1 despite revenues rising to a two-year high, with net losses of VND2.62 trillion (US$113.1 million). Revenues were up 55 percent year-on-year to VND11.6 trillion, the highest since 2020, when Covid-19 started to cripple the aviation industry.

    But it reported a ninth consecutive quarterly loss, with a total gross loss from the sales of products and services of around VND1.6 trillion due to higher costs. Fuel, for example, cost VND465 billion more than budgeted and accounted for 30 percent of transport costs.

    The carrier said the results clearly reflected the impact of Covid on the aviation industry despite the relatively quick recovery by the domestic market. Meanwhile, international services remain in limbo, and the Russia-Ukraine crisis has driven fuel prices up sharply.

    As of March 31, Vietnam Airlines’ accumulated losses were VND24.5 trillion, some VND2.16 trillion higher than its charter capital. The management said the airline could “basically maintain its liquidity until this year-end” based on the expected recovery by the industry.

    But it also sought the government’s support to ensure liquidity and seeks to accelerate the restructuring of subsidiaries and associates.

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  • Government rejects airlines’ demand for further tax cuts

    Government rejects airlines’ demand for further tax cuts

    The Ministry of Finance has turned down airlines’ requests for further tax breaks, saying they have received enough support from the government.

    In response to several airlines’ request to reduce value-added tax from 8 percent to 5 percent and fuel import tax from 7 percent to zero, the ministry said in a statement Friday that only the National Assembly can decide on VAT cuts.

    The current 8 percent VAT is already a reduction from the normal 10 percent, and aviation companies are also eligible for the lower rate, it said.

    It also pointed out that the aviation industry has already benefited from a lot of support in terms of taxes and fees since the pandemic began.

    Environment tax on jet fuel has been reduced by half to VND1,500 per liter until the end of this year.

    It is important to ensure a balance between the benefits companies and the government get, the ministry said.

    Vietnamese carriers served 14.5 million passengers in the first four months of this year, up 26.3 percent year-on-year, according to the General Statistics Office.

    Airlines resumed regular international services in March after a two-year hiatus due to Covid-19.

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  • Aviation yet to gain takeoff momentum

    Aviation yet to gain takeoff momentum

    On Mar. 15, Vietnam fully reopened its borders to foreign tourists, allowing quarantine-free entry and reinstated its pre-pandemic visa policies, including waivers for nationals of 24 countries.

    “These positive moves have contributed to strengthening confidence in a brighter picture for the aviation industry this year,” Nguyen Huu Nam, deputy director of the HCMC chapter of the Vietnam Chamber of Commerce and Industry (VCCI), said at an event held last week to present the Vietnam International Aviation Exhibition (VIAE 2022) set to take place in September.

    Regarding this year’s prospects, brokerage Bao Viet Securities (BVSC) has said in recent report that if new coronavirus variants are not too dangerous, international routes can recover strongly from the end of the second quarter onwards.

    It has forecast the number of domestic and international passengers in 2022 at 30 million and five million, up 89.9 percent and 4.6 percent respectively over last year.

    Meanwhile, Viet Capital Securities JSC (VCSC) estimates the number of domestic flights has reached 94 percent of the pre-pandemic period (2019).

    The company expects that the total number of domestic passengers for Vietnam Airlines and Vietjet Air this year will be 92 percent and 91 percent of 2019, respectively; and that of international passengers will be 44 percent.

    Nguyen Phuoc Thang, Head of Science – Technology and Environment Department of Civil Aviation Authority of Vietnam, said from now until the end of August, carriers will increase the number of flights to serve tourists and the market will recover “very quickly.”

    The industry is coming out of two quiet years, resuming international commercial flights about a month ago.

    As for international flights, Vietnam officially resumed services on nine routes on Jan. 1 before reopening flights to all markets starting mid-February with several Covid related restrictions.

    According to the General Statistics Office, 91,000 foreigners arrived in Vietnam in the first quarter, up 89.1 percent against the same period last year. Of these, 90.5 percent came on flights, up 165.2 percent.

    In 2021, the number of passengers dropped to the lowest ever level in history, to 15.9 million, with that of foreign and domestic passengers dropping by 96.5 percent and 50.5 percent against 2020, respectively.

    As the fourth Covid-19 wave hit the country in April last year, domestic flights were put on hold late August and only a limited number of flights resumed early October.

    Between Oct. 10-20, only one return flight was allowed on 19 domestic routes compared to 58 routes in 2019. and it was not until after that pilot period that domestic flights resumed gradually.

    The demand for flying in Vietnam entered the “new normal” phase during the latest Tet, or Lunar New Year holiday, which last nine days starting Jan. 29.

    According to the Vietnam Air Traffic Management Corporation (VATM), Vietnamese carriers operated 10,711 flights on domestic routes between Jan. 29 and Feb. 2, an increase by more than 69 percent against the previous Tet holiday.

    However, the aviation industry has several obstacles to contend with before it gains a strong recovery momentum. One major obstacle is access to its major feeder markets before the pandemic, namely, China, South Korea, Japan and Russia.

    For now, China is still pursuing a “zero Covid” policy and South Korea still maintains tight border control. The ongoing Russia-Ukraine crisis will also prevent Russian tourists from going on tours abroad.

    The VCSC has suggested that Vietnam diversify its markets while waiting for the traditional ones to recover.

    According to Destination Insights with Google, the U.S. and Europe are among markets with the highest search demand for information on accommodation and air travel to Vietnam since the reopening was announced.

    The other obstacle airlines could face in the near future is fuel prices, which accounted for 29 percent and 43 percent of the input costs for Vietnam Airlines and Vietjet Air in the 2015-2019 period.

    In January, the average price of jet fuel rose to about $101 per barrel, higher than the $77.8 forecast by the International Air Transpo

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  • Vietnam Airlines accumulated loss nears charter capital

    Vietnam Airlines accumulated loss nears charter capital

    The accumulated loss of national flag carrier Vietnam Airlines climbed to VND21.98 trillion ($928.39 million) last year, roughly the same as its charter capital.

    The airline was hit hard by the Covid-19 pandemic that saw borders closed and commercial flights suspended for two years.

    It posted a loss of VND13.02 trillion last year alone, with revenue dropping 31 percent year on year to VND28.09 trillion.

    The airline increased its charter capital by 56 percent to VND22.14 trillion last year by issuing 800 million shares, with the State Capital Investment Corporation (SCIC) contributing an additional VND6.89 trillion.

    The Commission for Management of State Capital at Enterprises (CMSC) now holds a 55.2 percent stake in the flag carrier, the SCIC 31.14 percent, and Japan’s ANA airline 5.62 percent.

    The airline has been increasing the number of flights it operates since the beginning of this year as the government began lifting restrictions based on rising vaccination rates.

    It operated 7,314 flights last month, up nearly 21 percent year-on-year.

    The airline has proposed that the government raises the price cap for domestic travel from April 1 and add a fuel surcharge for local routes as fuel prices have soared in recent months.

  • Vietnam Airlines eyes airfare cap hike, fuel surcharge

    Vietnam Airlines eyes airfare cap hike, fuel surcharge

    Vietnam Airlines proposed to raise the price cap for domestic travel from April 1 and add a fuel surcharge for local routes.

    The current price cap of air transportation services is no longer suitable, the airline said in its proposal sent to the Ministry of Transportation and the Ministry of Finance on March 14.

    The current maximum fare is VND2.2 million ($96) for routes under 850 kilometers, and VND3.75 million for those above 1.280 kilometers.

    The higher cap would serve to offset costs of rising oil prices and improve service quality, the airline said.

    Its proposal also advocated for a fuel surcharge on domestic routes and full environmental tax exemption for aviation fuel in 2022, which would save the airline more than VND600 billion if approved.

    Previously, the Civil Aviation Authority of Vietnam had repeatedly requested the airfare cap be removed, but to no avail.

    Last year, the national carrier proposed to set price floors between VND560,000 and VND1.4 million for air tickets on domestic routes, but the Ministry of Transportation rejected the idea.

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  • Vietnamese carriers open ticket sales for international flights

    Vietnamese carriers open ticket sales for international flights

    Vietnam Airlines and Bamboo Airways have opened ticket sales to several locations including the U.S., Japan and Taiwan, signaling the resumption of international travel on New Year’s Day.

    National flag carrier Vietnam Airlines is offering tickets between HCMC and Phnom Penh in Cambodia, with one-way prices starting at VND2.5 million ($109.54). From Hanoi to Tokyo, the starting fare is VND11.7 million; and from HCMC to San Francisco, VND21.2 million.

    All flights are scheduled for January 1, 5 and 9, respectively.

    Vietnam Airlines is not offering tickets to Singapore and Taipei yet, even though it has received permission from the Civil Aviation Authority of Vietnam (CAAV) to reopen flights on these routes.

    Meanwhile, private airline Bamboo Airways is offering tickets from Hanoi to Taipei at VND4.5 million one-way once a week starting January 5.

    Round-trip tickets are not being offered at this point.

    Vietnam requires arriving passengers to test Covid-19 negative and have certificates of vaccination or Covid-19 recovery. They will also need to isolate themselves at a location of their choice for three days after arrival.

    Those who are not fully vaccinated will need to guarantee that they will isolate themselves for at least seven days at home or a location approved by local authorities.

    The CAAV has approved the resumption of international flight routes to Japan, Taiwan, Singapore, Cambodia and the U.S, with each domestic airline allowed to operate four flights a week on each route.

    South Korea, China, Laos and Thailand have not finalized their responses to Vietnam’s request for flight resumption.

    Vietnam closed its borders and grounded international flights in March 2020, allowing in only citizens, foreign experts, investors, and highly-skilled workers coming in on special flights.

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  • Vietnam Airlines scores $1 bln discount on jet lease

    Vietnam Airlines scores $1 bln discount on jet lease

    Vietnam Airlines and Air Lease Corporation have agreed on a leasing discount exceeding $1 billion for 18 aircraft while the former face financial challenges amid the pandemic.

    U.S.-based ALC, one of the biggest aircraft leasers in the world with 450 jets, will reduce leasing charges by $420 million for the rest of the contract duration of existing jets while the remaining $600 million will be discounted on new leases.

    Vietnam Airlines is leasing 16 jets from ALC, comprising 12 narrow-body A321 Neo and four wide-body Boeing B787-10.

    With the biggest fleet in Vietnam of over 100 jets, the national flag carrier is facing financial pressure in retaining its aircraft, with many routes suspended due to Covid-19.

    Restructuring its fleet and cutting costs are its main goals to overcome the Covid-19 crisis, the airline stated.

    CEO of the carrier Le Hong Ha said Tuesday the airline would have an oversupply of jets until 2025, and plans to sell 27 over the next two years.

  • Vietnam Airlines to sell 27 planes

    Vietnam Airlines to sell 27 planes

    Vietnam Airlines plans to sell 15 planes this month and 12 others in the next two years, its CEO said.

    “Vietnam Airlines plans to sell nine A321s and six ATR-72s in December. From 2022 to late 2023, an additional 12 A321s will be sold,” CEO Le Hong Ha told the extraordinary general meeting of shareholders Tuesday.

    The plan is aimed at reducing the number of aircraft Vietnam currently owns and accelerating its fleet modernization, replacing planes aged over 12 years, he explained, predicting that there would still be an aircraft surplus by 2025.

    Vietnam Airlines is estimated to have an excess of eight wide-body planes and 22 narrow-body equivalents next year. It currently has 106 aircraft, including 29 wide-body planes, and seven ATR-72s. It has sold two A321s in the last five months.

    With the civil aviation industry hard hit by Covid-19, Vietnam Airlines has removed seats from eight wide-body passenger planes and seven A321s to use as cargo- aircraft.

    The national flag carrier recorded a net loss of over VND3.5 trillion ($154.3 million) in the third quarter, a decrease compared to the first two quarters.

    As of September, the airlines’ total assets were valued at more than VND67 trillion, up more than VND4.5 trillion over the beginning of the year.

    Vietnam’s domestic aviation market in 2022 will be 70-75 percent of that in 2019, before the pandemic’s onset, and fully recover in 2023, he predicted.

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