Vietnam Airlines reduces losses thanks to domestic market

Vietnam Airlines Corporation – JSC (Vietnam Airlines) has just released its mid-year financial report for the second quarter of 2022, with a decrease in loss compared to the first quarter of 2022.
Vietnam Airlines reduces losses thanks to domestic market
A Vietnam Airlines aircraft prepares for take off from Tan Son Nhat. (Photo: VNS)

Accordingly, in the second quarter of 2022, the parent company's loss was below 44% compared to the same period last year, at VND 2,243 billion. Consolidated loss was below 43% y/y, at 2,568 billion VND.

Accumulated in the first 6 months of 2022, the parent company's loss is 4,685 billion VND, nearly 39% less than the same period last year. Consolidated loss was 5,254 billion VND, nearly 40% less than the same period last year.

A representative of Vietnam Airlines shared that the above results were achieved mainly thanks to the rapid recovery of the domestic market. However, there are still many difficulties that make the company unable to escape losses; in which, the price of jet fuel (accounting for 40% of the operating cost) increased dramatically, the average fuel price doubled over the same period.

Specifically, in November 2021, Vietnam Airlines built a flight fuel scenario that is expected to be 80 USD/barrel of Jet A1, while the average of previous years was only 76 USD/barrel. By 2022, the average price of fuel in the first 6 months of the year is up to 116 USD/barrel of Jet A1, by July it is 165 USD/barrel of Jet A1, double the expected.

A representative of Vietnam Airlines further analyzed that a difference of only 1 USD in flight fuel increased the cost of Vietnam Airlines to 10 billion VND/month. With the difference from 80 USD/ barrel of Jet A1 to 116 USD/ barrel of Jet A1, in the first 6 months of the year, Vietnam Airlines incurred an additional cost of flight fuel of about VND 2,300 billion.

Regarding the exploitation market, along with the general signs of prosperity of the aviation industry, Vietnam Airlines for the first time recorded a profit in many peak days in the summer of July 2022.

In the first half of 2022, Vietnam Airlines Group, consisting of 3 airlines: Vietnam Airlines, Pacific Airlines and VASCO, reached nearly 9.5 million passengers, an increase of 24.6% compared to the plan reported to the Annual General Meeting of Shareholders. 2022.

However, the international market recovered slowly and was not as expected because this market accounted for 65% of Vietnam Airlines' revenue, while the first 6 months of 2022 only reached about 12% compared to before the Covid-19 pandemic.

Statistics show that in the first 6 months of 2022, Vietnam Airlines has just resumed 35 international routes, equal to 53% compared to before the pandemic. The airline has also not been able to reopen flights to China, Myanmar, and Russia due to restrictions from the authorities or political tensions.

On the trading market, closing the last session of the week (July 29), HVN shares of Vietnam Airlines Corporation - JSC were listed at 16,500 dong/share.

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(Source: VNA)