National carrier Vietnam Airlines’ loss-making streak extended to 4th year

National flag carrier Vietnam Airlines posted a consolidated net loss of VND5.81 trillion ($237.8 million) in 2023, marking its fourth consecutive year of unprofitability.

The 2023 loss narrowed considerably from VND11.3 trillion in 2022, the company’s consolidated financial statement showed.

The airline booked revenue of VND91.46 trillion ($3.75 billion) last year, up 30% year-on-year. However, significant increases in cost of goods sold, and sales and management costs were behind its loss.

An incomplete recovery of the international transport market, weak travel demand, stiff competition, high fuels prices, and geopolitical conflicts are attributable to Vietnam Airlines’ underperformance, the firm said.

In the fourth quarter last year, the carrier incurred a consolidated net loss of VND2.06 trillion ($84.56 million), the 16th quarterly loss in a row.

As a result, it had a cumulative loss of VND40.96 trillion ($1.68 billion) as of end-2023 and an owner’s equity of negative VND16.95 trillion ($694 million).

As per current regulations of the Ho Chi Minh Stock Exchange (HoSE) where Vietnam Airlines is listed as HVN, the firm should have been delisted for reporting losses in three consecutive years.

However, the firm may be allowed to remain listed if amendments to the Law on Securities are passed and the government wants it too, as the draft revised Law on Securities gives that power to the government.

Vietnam Airlines’ latest financial statement also showed that it had total assets of VND57.62 trillion ($2.36 billion) as of end-2023, down 5% from a year earlier. Its cash and cash equivalents were VND2.55 trillion ($104.5 million), little changed from end-2022.

However, it liabilities amounted to VND74.56 trillion as of end-2023, including VND60.61 trillion in short-term liabilities.