PM orders plan to assist Vietnam Airlines' survival

Prime Minister Pham Minh Chinh has asked the Commission for the Management of State Capital at Enterprises (CMSC) to submit a plan this month for resolving problems facing Vietnam Airlines.

Reviewing a recent meeting with 19 major state-owned enterprises (SOEs), the CMSC should prepare a 2021-2026 plan on easing hardships that the national flag carrier is experiencing due to negative impacts of the Covid-19 pandemic, he said.

Vietnam Airlines, listed on the Ho Chi Minh Stock Exchange (HoSE) as HVN, has outlined a 2022-2025 restructuring plan that is awaiting approval of relevant authorities.

In particular, the carrier aims to restructure its asset and financial investment portfolio to improve income and prepare for share issuance to raise equity.

Meanwhile, the Ministry of Finance is drafting legal framework amendments that would facilitate Vietnam Airlines divesting from its subsidiary Pacific Airlines.

Vietnam Airlines posted a consolidated net loss of VND5.81 trillion ($237.8 million) in 2023, marking the fourth consecutive year of losses. However, the 2023 loss was considerably less than the VND11.3 trillion recorded in 2022, according to the company’s consolidated financial statement.

The airline recorded revenues of VND91.46 trillion ($3.75 billion) last year, up 30% year-on-year. However it also saw significant increases in cost of goods sold as well as sales and management costs.

An “incomplete recovery” of the international transport market, weak travel demand, stiff competition, high fuel prices and impacts of geopolitical conflicts affected its performance, the carrier said.

The prime minister has also asked the CMSC to complete draft plans in the first quarter of the year for restructuring and/or speeding up progress of Vietnam Expressway Development Investment Corporation (VEC), the Dung Quat shipbuilding factory and expansion of Thai Nguyen Steel Plant.