Vietnam Airlines posts $113 mln Q1 loss
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Vietnam Airlines remained in the red in Q1 despite revenues rising to a two-year high, with net losses of VND2.62 trillion (US$113.1 million). Revenues were up 55 percent year-on-year to VND11.6 trillion, the highest since 2020, when Covid-19 started to cripple the aviation industry.
But it reported a ninth consecutive quarterly loss, with a total gross loss from the sales of products and services of around VND1.6 trillion due to higher costs. Fuel, for example, cost VND465 billion more than budgeted and accounted for 30 percent of transport costs.
The carrier said the results clearly reflected the impact of Covid on the aviation industry despite the relatively quick recovery by the domestic market. Meanwhile, international services remain in limbo, and the Russia-Ukraine crisis has driven fuel prices up sharply.
As of March 31, Vietnam Airlines’ accumulated losses were VND24.5 trillion, some VND2.16 trillion higher than its charter capital. The management said the airline could “basically maintain its liquidity until this year-end” based on the expected recovery by the industry.
But it also sought the government’s support to ensure liquidity and seeks to accelerate the restructuring of subsidiaries and associates.
Questions & Answers
Q.What were Vietnam Airlines' revenues in Q1 and how do they compare to previous periods?
What were Vietnam Airlines' revenues in Q1 and how do they compare to previous periods?
Revenues reached VND11.6 trillion, marking a 55 percent increase year-on-year. This figure represents the highest revenue recorded by the airline since 2020, when the Covid-19 pandemic began impacting the aviation industry.
Q.What were the main reasons for the airline's continued losses despite increased revenues?
What were the main reasons for the airline's continued losses despite increased revenues?
Higher costs contributed significantly to the losses. Fuel costs, for example, exceeded the budget by VND465 billion and represented 30 percent of transport costs. The ongoing limbo of international services and the Russia-Ukraine crisis also drove fuel prices up sharply.
Q.What is the current financial position of Vietnam Airlines regarding its accumulated losses and charter capital?
What is the current financial position of Vietnam Airlines regarding its accumulated losses and charter capital?
As of March 31, Vietnam Airlines’ accumulated losses totalled VND24.5 trillion. This amount is approximately VND2.16 trillion higher than the airline's stated charter capital, indicating a challenging financial situation.
Q.What measures is Vietnam Airlines taking to address its liquidity concerns?
What measures is Vietnam Airlines taking to address its liquidity concerns?
The management expects to maintain liquidity until year-end through industry recovery, but is also seeking government support. Also, the airline aims to accelerate the restructuring of its subsidiaries and associates to improve its financial stability.
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