Vietnam Airlines revenue growth of more than 30% in 2023, Q1/2024 continues to flourish

Vietnam Airlines reported consolidated revenue in 2023 from core business activities of VND92,231 billion, gross profit of VND3,885 billion. At the peak of Lunar New Year in the first quarter of 2024, the airline's operations continued to show positive signs.

According to the newly released audited consolidated financial report for 2023, Vietnam Airlines Corporation recorded VND92,231 billion in revenue from sales and service provision, an increase of more than VND21,400 billion (or 30%) compared to 2022. This is also the third highest revenue figure in the corporation's history of operations, only lower than the period 2018 - 2019 when Covid-19 had not yet broken out. In addition, Vietnam Airlines also recorded a gross profit of VND3,885 billion in 2023, marking the first time since the beginning of the pandemic that the corporation has had a gross profit for the entire fiscal year. This result was achieved thanks in large part to Vietnam Airlines' own efforts. The explanatory report said that the corporation has proactively implemented many short-term and long-term solutions to minimize damage caused by Covid-19 and improve production and business results, supplement capital and cash flow in 2023.

Vietnam Airlines will reduce losses and return to effective business in the last quarters of 2023 and early 2024.

In fact, in 2023, Vietnam Airlines quickly restored the entire domestic flight network and most international routes compared to before the Covid-19 pandemic, and at the same time, opened new routes to Australia and India. The airline promoted sales, diversified products and services, helping to increase revenue and enhance the image and brand of Vietnam Airlines. Vietnam Airlines also focused on cutting costs. In addition to cost reductions according to production scale, Vietnam Airlines has implemented price reduction negotiations, savings, and cost reductions with an estimated amount of more than 3,200 billion VND. 2023 is also the year that Vietnam Airlines promotes the application of information technology and digital transformation, closely following the digital transformation strategy in the period of 2022-2026. The airline has applied new technologies and software to many work processes and service touch points, helping to increase labor productivity, operational efficiency and service quality. On the other hand, Vietnam Airlines' operations are facing many challenges such as uneven recovery of the international transport market, overcapacity and fierce competition, high fuel prices, Russia-Ukraine, Israel-Hamas conflicts and increasing financial risks (exchange rates, interest rates). In addition, slowing global and domestic economic growth also affects passenger spending. According to a report by the International Monetary Fund (IMF), global GDP growth is estimated to decrease from 3.5% in 2022 to 2.9% in 2023. Domestically, growth decreased from 8.02% in 2022 to 5.05% last year. As a result, Vietnam Airlines' audited business operations still suffered losses in the fourth quarter and the entire year of 2023. Specifically, the consolidated after-tax loss in the fourth quarter of 2023 was VND1,982 billion, VND1,457 billion lower than the loss in the same period of 2022, equivalent to a loss reduction of 42.4%. Vietnam Airlines said the reason for this change was that the parent company Vietnam Airlines and its subsidiary Pacific Airlines reduced their losses, while other subsidiaries such as NCS, VAECO and VACS made more profits. The after-tax loss for the entire year of 2023 was VND5,631 billion, down 50% compared to the previous year. According to Vietnam Airlines' forecast, the international market will gradually recover, and the corporation's business operations are also expected to have more positive results in 2024-2025. In the first quarter of 2024, the international aviation market is assessed to have improved in most regions, except for some Northeast Asian markets such as China, Japan and Hong Kong (China). The group of routes to Australia, India and the US grew well compared to the same period and compared to 2019. The domestic aviation market has basically recovered, with many domestic routes growing well, especially during the peak period of Lunar New Year 2024. Specifically, from January 25 to February 24 (ie from December 15 to January 15 of the lunar calendar), Vietnam Airlines operated more than 13,300 flights, an increase of 5.4% over the same period. On average, the airline operated more than 420 flights per day, transporting more than 2 million passengers safely and on time. However, the fluctuation of exchange rates of some currencies that account for a large proportion of payments compared to the USD has also had adverse effects on the business activities of the corporation. At the same time, fuel prices remain high, affecting production and business. During the April 30 - May 1 holiday, Vietnam Airlines plans to provide nearly 560,000 seats, equivalent to more than 2,800 flights on its domestic and international network from April 26 to May 2, 2024. Accordingly, the number of increased flights will be concentrated on tourist routes such as between Hanoi, Ho Chi Minh City and Da Nang, Hue, Quy Nhon, Nha Trang, Da Lat, Phu Quoc, Con Dao, etc. On the international flight network, Japan, Korea, China, Thailand, Laos, and Cambodia are the destinations with the most flights of Vietnam Airlines. Currently, many flights from Hanoi to Hue, Quang Binh, Nha Trang, Phu Quoc or Ho Chi Minh City to Da Nang, Phu Quoc... during peak season are 50% to 70% full.

Dan Tri Newspaper

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