Vietnam Airlines Group eyes record revenues
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Vietnam Airlines Group, which operates three airlines, targets record revenues of VND80.89 trillion (US$3.18 billion) this year but expects the profit rate to be less than 1%.
Its first quarter revenues rose by 25% to VND28.27 trillion.
Amid high demand, the company expects to see international and domestic passenger numbers rise by 20% and 13%.
High fuel costs are expected to be a drag on profits. The company disclosed to shareholders that if fuel prices increase by $1 per barrel, its costs rise by VND230 billion a year.
The economic slowdown is causing international travel to recover at a slow pace, while geopolitical tensions show no signs of abating, it said. Its top market, China, is also seeing an extremely slow recovery.
Many of its debts start falling due in July, posing a financial burden.
Vietnam Airlines Group, the parent of Vietnam Airlines, Pacific Airlines and Vietnam Air Services Company, plans to sell its stakes in Tan Son Nhat Cargo Service Company this year for VND1.7 trillion.
Questions & Answers
Q.Why is Vietnam Airlines Group expecting a low profit rate despite record revenue targets?
Why is Vietnam Airlines Group expecting a low profit rate despite record revenue targets?
High fuel costs are anticipated to be a significant drag on profits. Also, the economic slowdown is affecting the recovery of international travel, and geopolitical tensions persist, impacting the company's financial outlook.
Q.What are the company's expectations for passenger growth this year?
What are the company's expectations for passenger growth this year?
Amid high demand, Vietnam Airlines Group expects international passenger numbers to rise by 20%. Domestic passenger numbers are projected to increase by 13% over the same period.
Q.How will rising fuel prices impact Vietnam Airlines Group's costs?
How will rising fuel prices impact Vietnam Airlines Group's costs?
The company has disclosed that if fuel prices increase by $1 per barrel, its annual costs are expected to rise by VND230 billion. This indicates the significant financial sensitivity to fuel market fluctuations.
Q.What specific financial challenges is Vietnam Airlines Group currently facing?
What specific financial challenges is Vietnam Airlines Group currently facing?
Many of its debts are scheduled to start falling due in July, which presents a financial burden. The slow recovery of its top market, China, also contributes to these challenges.
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