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What makes Vietnam Airlines so profitable?

Cost of goods sold increased slightly, while revenue increased, helping Vietnam Airlines record a gross profit of up to VND6,271 billion in the first quarter. This level corresponds to a gross profit margin of nearly 21% - higher than competitors and higher than the airline's pre-pandemic period.

Báo Tuổi TrẻBáo Tuổi Trẻ01/05/2025

Vietnam Airlines - Ảnh 1.

Vietnam Airlines approved in principle to buy 50 planes - Photo: VNA

The recently announced financial report for the first quarter of 2025 of Vietnam Airlines Corporation (HVN) recorded positive revenue.

The significant improvement in HVN's business results occurred in the context of a strong market recovery, high demand for travel during the peak Tet holiday season, falling fuel prices, but ticket prices in the past were still reflected as high...

Vietnam Airlines' gross profit margin 'beats' competitors

According to the report, HVN's consolidated net revenue in the first quarter of 2025 reached VND30,550 billion, equivalent to nearly USD1.2 billion. This figure increased by nearly 10% compared to the same period last year, marking the 5th consecutive quarter around the billion USD mark.

Although it did not record a sudden profit of VND 3,627 billion (mainly due to debt cancellation) like in the first quarter of 2024, HVN's pre-tax profit was still at VND 3,624 billion, down only about 20% over the same period and equal to the previous 3 quarters combined.

The "great credit" is due to the fact that the company's gross profit jumped to VND6,271 billion in the period, an increase of 54% compared to the first quarter of 2024. While revenue increased well, the cost of goods sold remained almost the same (only increased by more than 1.6%), helping the company "make a big profit".

Data: Financial statements/TTO

With a gross profit margin of nearly 21%, Vietnam Airlines is "beating" its industry rival Vietjet Air (VJC). According to the report, VJC's net revenue in the first quarter of 2025 reached VND17,952 billion, an increase of less than 1% over the same period.

The low-cost airline's gross profit also improved positively, reaching VND2,403 billion, up nearly 38%. However, although it was better than the same period last year, the gross profit margin was only over 13%, lower than HVN.

A business analyst at a securities company said that fuel prices account for a relatively large part of the cost structure of airlines.

Fuel prices are estimated to account for 25-32% of the operating cost of a domestic flight. However, fuel prices in the first quarter of this year have decreased and are lower than last year, helping airlines make significant savings.

According to this person, increasing input costs are often the reason for airlines to increase ticket prices, but when this type of goods decreases, whether airlines reduce ticket prices accordingly will be a matter of concern for consumers.

Returning to Vietnam Airlines' first quarter financial report, air transport revenue reached VND24,329 billion, accounting for nearly 80% of total revenue. The rest came from sales with VND4,633 billion, and ancillary transport and aircraft repair activities with VND1,143 billion.

Big profits, how is Vietnam Airlines' financial capacity improving?

According to an analysis report from Techcom Securities (TCBS), Vietnam Airlines will account for 33.6% of the domestic aviation market share in 2023.

HVN owns a system of more than 100 aircraft of various types. In addition to the fleet, Vietnam Airlines also has a great advantage from owning a complete technical infrastructure system for flight services and ground service facilities. Thanks to that, Vietnam Airlines is not dependent on its supply partners, according to TCBS.

Recently, Vietnam Airlines has proposed to the competent authority and received approval for the project to invest in 50 narrow-body aircraft of the Airbus A320 NEO or Boeing 737 MAX series and 10 spare engines. The total investment of the project is about 3.697 billion USD, equivalent to 92,810 billion VND.

Regarding the airline's financial capacity, the latest report shows that Vietnam Airlines' equity is only negative VND5,854 billion at the end of the first quarter of 2025, a significant decrease compared to VND9,344 billion at the end of last year.

HVN's financial indicators have improved significantly after 5 consecutive quarters of profit reporting - Data: Consolidated financial statements

Thanks to continuous large profits, HVN's accumulated loss has narrowed to VND30,215 billion. However, the company's short-term assets reached VND19,408 billion, significantly lower than its short-term debt of VND56,939 billion.

Vietnam Airlines boss receives income increase

The report shows that Mr. Dang Ngoc Hoa - Chairman of HVN, received a salary of nearly 352 million VND in the first quarter of 2025, 24% higher than the same period last year. The two members of the Board of Directors, Mr. Le Truong Giang and Mr. Ta Manh Hung, both received 293.25 million VND, an increase of 30%.

In the executive board, Mr. Le Hong Ha - the company's general director received a salary of 306 million VND in the first quarter of 2025, nearly 22% higher than the same period. 5 deputy general directors received 225 million VND, an increase of 26%.

Total remuneration and salary paid to HVN leaders in the first quarter of the year was more than 3.17 billion VND, an increase of 10%.

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BINH KHANH

Source: https://tuoitre.vn/vietnam-airlines-lai-dam-nho-dau-20250501203230047.htm


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