Flag carrier Vietnam Airlines strives to reach break-even this year

Loss-making national flag carrier Vietnam is aiming to offset its operating costs and approach the break-even mark this year with government support, said its chairman Dang Ngoc Hoa.

In 2024 and beyond, the airline will expand its operations, resuming suspended routes and launching new air links, including intercontinental flights, Hoa said at a Thursday conference held to discuss monetary policy handling to assist local businesses.

The firm incurred a consolidated net loss of VND5.81 trillion ($237.8 million) in 2023, marking its fourth consecutive year of unprofitability, but lower than the loss of VND11.3 trillion in 2022, according to its financial statements.

Under current legislation, the carrier, with the government holding more than an 86% stake, should have been delisted from the Ho Chi Minh Stock Exchange due to extended losses.

Last month, Prime Minister Pham Minh Chinh asked the Commission for the Management of State Capital at Enterprises to submit a plan to help Vietnam Airlines survive.

At the conference, Hoa said that the carrier had been hit hard by Covid-19 and was still recovering post-pandemic. The government’s relaxed visa policy has helped it recovered 80-90% compared to 2019 when the pandemic broke out.

Vietnam Airlines is calling for softer loans, particularly medium and long-term deals. It has also asked the central bank to direct commercial lenders to increase their credit lines for the carrier.

Under its restructuring plan, Vietnam Airlines will raise its charter capital. The carrier expects the government to direct financial institutions to aid it in this effort, Hoa added.

Vietnam Airlines now has charter capital of VND22.18 trillion ($897 million), with Japan’s ANA Holdings Inc. owning 5.62%.

Shares in Vietnam Airlines, coded HVN, dropped 1.11% to VND13,350 ($0.54) at the close on Friday.