Bamboo Airways' gross loss is higher than Vietnam Airlines and Vietjet

In 2022, Bamboo Airways' gross loss will be about 3,200 billion VND, 584 billion higher than Vietnam Airlines and 1,200 billion higher than Vietjet.

Bamboo Airways has provided a preliminary report on last year's business results in documents prepared for its annual meeting to be held in Hanoi next week.

In 2022, the airline's revenue increased nearly 3.3 times compared to 2021, reaching VND11,732 billion. Although revenue has improved positively, Bamboo Airways still cannot escape the situation of operating below cost price when recording a gross profit (the amount of money a business receives after deducting the cost of goods and services) of more than VND3,200 billion. The company said it still suffered a gross loss due to difficulties in the Northeast Asian market and the Russia-Ukraine conflict causing jet fuel prices to skyrocket.

In fact, operating below cost price is a common situation for Vietnamese airlines in the past few years due to the impact of Covid-19, sharp increase in input costs, and high interest rates. However, Bamboo Airways' gross loss last year was higher than that of two larger domestic airlines, Vietnam Airlines and Vietjet . Bamboo Airways owns a fleet of 30 aircraft, while Vietnam Airlines has over 110 aircraft, and Vietjet has over 80 aircraft.

Vietnam Airlines had a gross loss of about VND10,000 billion in 2021, but last year it dropped to a negative VND2,625 billion thanks to revenue recovering to 70% of pre-pandemic levels. Meanwhile, Vietjet had a gross loss of VND2,038 billion and VND1,993 billion in 2021 and 2022, respectively. Bamboo Airways' gross loss in 2021 was about VND4,060 billion.

Bamboo Airways has not yet announced more detailed indicators on operating costs, pre-tax profits, etc. in the meeting documents. However, at the extraordinary meeting in April, Mr. Nguyen Khac Hai, Deputy General Director of the airline, said that Bamboo Airways is still losing money in bad market conditions like the recent period.

In 2023, Bamboo Airways' situation has become more positive. Mr. Nguyen Ngoc Trong, Chairman of the Board of Directors of Bamboo Airways, informed that the airline had almost reached the break-even point in the first quarter when the fleet was operating at full capacity. According to Mr. Trong, Bamboo Airways "will take off from the ground from 2024" and make a profit from 2025.

A Bamboo Airways Boeing B787 wide-body aircraft. Photo: BAV — A Bamboo Airways Boeing B787 wide-body aircraft. Photo: *BAV*

This year, Bamboo Airways plans to achieve double-digit business growth, around 15-20% depending on market developments. To catch up with the recovery momentum, the airline is considering and calculating scenarios to increase its fleet, expand its flight network, and improve operational efficiency.

The airline will continue to improve its operating frequency and open new routes, focusing on target markets such as Europe, Northeast Asia, Southeast Asia and Australia. At the same time, Bamboo Airways will propose the Government to approve the adjustment of the policy to allow the fleet to increase to over 30 aircraft.

At the annual meeting on June 21, Bamboo Airways will elect members of the Board of Directors and Supervisory Board for the 2023-2028 term. Recently, the company has made some changes in top leadership positions during the transition to a new investor. Since the end of May, Mr. Nguyen Minh Hai has been the General Director of Bamboo Airways, replacing Mr. Nguyen Manh Quan - who has been with the airline since September 2020.

Two former leaders of Japan Airlines - the second largest airline in Japan - are also expected to join Bamboo Airways. Mr. Hideki Oshima, former Director of International Relations and Airline Alliances of Japan Airlines, will join the Board of Directors of Bamboo Airways and the Executive Board. Mr. Masaru Onishi, former President of Japan Airlines, will serve as Senior Advisor to the Board of Directors of Bamboo Airways.

Anh Tu

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