Vietnam Airlines will balance revenue and expenditure from 2024

On December 16, in Hanoi, Vietnam Airlines Corporation successfully held the 2023 Annual General Meeting of Shareholders. The meeting was attended by Mr. Nguyen Ngoc Canh - Vice Chairman of the State Capital Management Committee at Enterprises (SCMC), Mr. Le Anh Tuan - Deputy Minister of Transport , representatives of the Civil Aviation Authority and existing shareholders of Vietnam Airlines.

At the General Meeting, Vietnam Airlines shareholders discussed and voted to approve important contents such as: Report on the 2023 Business Production Plan; Audited Financial Report for 2022; Report on the activities of the Board of Directors (BOD) in 2022 and tasks for 2023; Report of the Board of Supervisors on the Company's business results, performance results of the Board of Directors, General Director; Report on salaries and remuneration of members of the Board of Directors, Board of Supervisors in 2022...

A challenging year

In 2022, airlines will face great difficulties and challenges due to high input costs, especially fuel costs. The average fuel price in 2022 is 124.4 USD/barrel, 14.1 USD/barrel higher than planned (110.26 USD/barrel), causing fuel costs in 2022 to increase by about 2,482 billion VND. Compared to 2019, fuel costs increased by about 7,625 billion VND. 2022 is also the year when the USD appreciates the most compared to local currencies in 2 decades. The high USD/VND exchange rate directly increases input costs.

In particular, 2022 is also a year that has witnessed many major changes in the global political , economic and social situation. When the international air transport market has only officially reopened since March 15. Many countries have not yet completely removed regulations on entry and quarantine, and passengers are still hesitant to travel. The large Chinese market has frozen due to the "zero - COVID" policy, and soon after that, the political conflict between Russia and Ukraine along with the potential risk of a European economic recession.

Impressive numbers

In the context of many unfavorable business and production conditions, Vietnam Airlines has proactively implemented many synchronous solutions to respond, ensuring continuous operation, creating an important premise for sustainable development in 2023 and the following years.

In particular, production management is emphasized. In 2022, Vietnam Airlines proactively developed plans according to many scenarios, actively managed production and business activities in accordance with the market recovery in the spirit of ensuring absolute safety in disease prevention and balancing operational efficiency. By the end of 2022, Vietnam Airlines had restored the entire domestic flight network compared to the pre-pandemic period and resumed operations on more than 70% of international routes; All transportation output targets exceeded the annual plan by 7% - 8%.

Vietnam Airlines is making efforts to resume and expand international flights. By the end of 2022, Vietnam Airlines will have an international flight network of 44 routes to 25 destinations in 16 countries and territories.

Vietnam Airlines also implemented cost-cutting and savings solutions. Total cost cuts in 2022 reached approximately VND7,226 billion. Of which, cost cuts thanks to internal solutions such as efforts to negotiate price reductions, savings, etc. reached approximately VND4,294 billion.

With a proactive response spirit, drastic implementation of restructuring solutions, and increasing revenue, Vietnam Airlines has achieved better results than the 2022 plan reported to the General Meeting of Shareholders.

End of 2022, Total consolidated revenue reached VND 71,775 billion, 20% higher than the plan set by the shareholders' meeting and 2.4 times higher than the 2021 results. The consolidated loss has decreased compared to the plan reported to the 2022 Annual General Meeting of Shareholders.

Vietnam Airlines transported 18.24 million passengers, exceeding the plan by 7.5%. Of which, international passenger volume reached more than 2.47 million passengers; domestic passengers reached 15.77 million passengers, exceeding the plan by 9% and increasing by 14.2% compared to 2019.

In 2022, Vietnam Airlines also made its mark by winning 16 major domestic and international awards such as: World Travel Award (Global): World's Leading Airline for Cultural Identity; World Travel Award (Asia): Asia's Leading Airline for Economy Class and Asia's Leading Airline Brand; National Brand Product Award 2022; YouGov Award Top 10 Best Brands in Vietnam 2022... These awards help promote the image and brand of Vietnam Airlines, contributing to creating goodwill for partners and customers about products and services, promoting sales development activities, and increasing revenue.

Vietnam Airlines' goals in 2024

Moving into 2023, After many countries fully reopened, regular domestic and international flights to these countries resumed, helping the aviation industry maintain passenger transport operations and balance cash flow in the short term.

In the first half of 2023, the recovery momentum of the air transport market was quite strong in the first 4 months of the year, but it tended to slow down in the second quarter; international air transport activities are still much lower than pre-pandemic levels; important input factors (fuel prices, interest rates) have stabilized but are still at high levels. In the second half of 2023, production and business activities will still face many difficulties due to input factors such as high fuel prices and unfavorable and unpredictable developments in the USD exchange rate.

Speaking at the Congress, Mr. Dang Ngoc Hoa, Chairman of the Board of Directors of Vietnam Airlines, said: “We assess that there are both opportunities and challenges. To overcome challenges and seize opportunities for recovery and development, Vietnam Airlines has developed synchronous plans and solutions in all areas. In particular, the Company focuses on implementing the restructuring project, with solutions aiming to balance business revenue and expenditure from 2024."

Vietnam Airlines will continue to make efforts to implement solutions to restructure production and business activities, proactively develop and implement solutions to restructure finance, restructure assets, streamline the organization, improve the quality of resources; promote the application of information technology and digital transformation, closely following the Vietnam Airlines digital transformation strategy for the period 2022-2026. Accordingly, continue to aim to become a digital airline, creating a foundation for Vietnam Airlines to continue to develop effectively and sustainably./.

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