July 13, 2024

Vietnam Airlines Group Aims for Record Revenue Amid Challenges

Vietnam Airlines Group targets record revenues of VND80.89 trillion this year despite anticipating less than 1% profit rate due to high fuel costs and economic slowdown.

Vietnam Airlines

Photo Source: www.vietnamairlines.com

Vietnam Airlines Group, which operates Vietnam Airlines, Pacific Airlines, and Vietnam Air Services Company, is targeting record revenues of VND80.89 trillion (US$3.18 billion) for this year, despite expecting a profit rate of less than 1%. The group’s first quarter revenues rose by 25%, reaching VND28.27 trillion.

Amid rising demand, the company forecasts a 20% increase in international passenger numbers and a 13% rise in domestic passengers. However, high fuel costs are expected to impact profitability significantly. The company disclosed that a $1 increase in fuel prices per barrel would raise its annual costs by VND230 billion.

The economic slowdown is hampering the recovery of international travel, with geopolitical tensions adding to the uncertainty. The group’s primary market, China, is experiencing a notably slow recovery.

Additionally, many of the company’s debts are due starting in July, adding to the financial pressure. To alleviate some of the burden, Vietnam Airlines Group plans to sell its stakes in Tan Son Nhat Cargo Service Company for VND1.7 trillion this year.

Vietnam Airlines Group is also looking at operational efficiencies to mitigate the impact of rising costs and economic challenges. The company is exploring measures such as optimizing flight routes, investing in fuel-efficient aircraft, and enhancing digital transformation efforts to improve operational efficiency and reduce expenses. By leveraging technology, the Group aims to streamline processes, enhance customer experience, and maintain competitive advantage in the aviation industry.

Photo Source: SGGP English Edition

Despite the financial challenges, Vietnam Airlines Group remains optimistic about its long-term growth prospects. The company is focusing on expanding its network, entering new markets, and forming strategic alliances with other airlines to boost connectivity and capture a larger share of the market. Additionally, the Group is investing in training and development programs for its workforce to ensure high standards of service and operational excellence.

The management is also actively engaging with stakeholders, including government bodies, to seek support and navigate the complex regulatory landscape. Vietnam Airlines Group is committed to maintaining transparency with its shareholders and investors, regularly providing updates on its financial performance and strategic initiatives. By staying agile and responsive to market conditions, the Group aims to achieve its revenue targets and build a sustainable future.

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