Vietnam Airlines posts net loss of over $460 million

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Vietnam Airlines has posted a net loss of less than $500 million so far in the first nine months of 2020. The airline has benefited in recent months from a rebounding domestic market and a healthy repatriation program .

A loss of $463 million underscores the crisis facing Vietnam Airlines. Photo: Getty Images

The first nine months have gone well for Vietnam Airlines

All things considered, Vietnam Airlines did quite well for 2020. The airline posted a net loss of VND 10.75 trillion, or about $463 million. In March, Vietnam took strict measures restricting the entry of foreign nationals, which negatively impacted the operations of Vietnam Airlines.

The airline has since hemorrhaged money amid a suspension of flights. However, after only a few months, Vietnam’s domestic commercial flights began to resume. And, by June, Vietnam Airlines had fully restored its domestic flight schedule and more.

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Vietnam and Pacific Airlines
Vietnam Airlines and its subsidiaries have had a difficult year. Photo: Vietnam Airlines

The airline has also taken other decisive cost-cutting measures. This included workforce restructuring and reorganization, reorganized debt, and limited capital spending, which airlines around the world have been doing. At the same time, Vietnam Airlines offered cargo-only charters and worked with authorities to set up repatriations around the world.

Take advantage of opportunities

Vietnam Airlines, including its subsidiaries, such as Pacific Airlines, has captured more than 50% of the domestic market share. The airline group operated 46,700 flights and transported just under 12 million passengers and 146,000 tonnes of cargo.

The third quarter also went rather well for Vietnam Airlines. The airline carried more passengers than in the second quarter and worked to boost domestic tourism demand. Additionally, the airline launched 22 new domestic routes and currently operates over 300 flights per day.

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Vietnam Airlines flew an A350 on a repatriation flight from Equatorial Guinea. Photo: Getty Images

Repatriation flights have also been at the forefront of Vietnam Airlines’ international flights. The carrier saw opportunities to bring passengers home and flew to countries like Angola, Equatorial Guinea, USA, Taiwan, many European countries, etc. The airline operated more than 100 repatriation flights and brought back more than 30,800 citizens.

In addition, Vietnam Airlines has also operated over 2,600 cargo flights. Some of these thefts include donations of medical equipment and essential economic activities.

The future

Vietnam Airlines expects the fourth quarter to go better than the last two. The airline notes that the domestic market recovery coupled with limited resumptions of international flights will serve it well. The carrier continues to assess its network and will work with the relevant government authorities to reopen international flights if possible.

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Vietnam Airlines has a bright future ahead of it, but it has to get through this crisis. Photo: Getty Images

Cost reductions, debt rescheduling and other measures will continue. The standard bearer is not out of the woods yet. With intense domestic competition, Vietnam Airlines has often focused on transporting international passengers to and from the country. Until these flights resume, Vietnam Airlines will face intense competition in the domestic market.

Debt rescheduling and other cost-cutting measures will help the airline reduce cash commitments and preserve cash. Vietnam Airlines will have to be prepared in case the recovery does not turn out to be positive and again suffers losses. For now, however, the airline is in a good position to move forward.

What do you think of Vietnam Airlines’ results so far? Let us know in the comments!

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