Vietnam Airlines targets double pre-pandemic level pre-tax profit

National flag carrier Vietnam Airlines is targeting VND4.52 trillion ($177.67 million) in 2024 pre-tax profits, nearly double the VND2.53 trillion it achieved in pre-pandemic 2019.

The target was set by the carrier’s management board at its 2024 AGM on Friday, marking a significant turnaround from the carrier's 2023 loss of VND5.36 trillion ($210.6 million).

Listed on the Ho Chi Minh Stock Exchange as HVN, the airline targets VND105.94 trillion ($4.16 billion) in consolidated revenues this year, up 13.6% year-on-year.

The ambitious targets have been set amid enduring challenges to the local airline industry, including overseas political tensions, high fuel prices, and Pratt & Whitney engine issues.

Besides, the recovery of international traffic from and to Vietnam has fallen short of expectations and the carrier expects to see a slow rebound in its second-largest air market, China.

If all the 2024 targets are met, the carrier is projected to escape its negative equity situation by end-2025, said chairman Dang Ngoc Hoa, adding that the state-controlled company will announce plans for a capital base increase and share issuance later.

Vietnam Airlines is set to record 22.64 million passenger arrivals this year, up 7.6% year-on-year and 1% lower than 2019. Of this, the number of foreign passengers targeted is 7.64 million, up 120.2% year-on-year, but down 15.6% from 2019. Meanwhile, domestic air traffic numbers are set at 15 million, up 2.2% year-on-year and 8.7% over 2019.

The national flag carrier secured a VND12 trillion ($471.37 million) refinancing package as the government’s Covid-19 bailout assistance. It has cut costs by VND42.4 trillion ($1.67 billion) in the past four years, reduced aircraft leasing costs by VND16 trillion ($628.5 million) through negotiations with lessors, and has got repayment deadlines extended for VND8.3 trillion ($326.03 million).

It has also undergone restructuring through digital transformation and streamlining its workforce, Hoa said.

The AGM elected Daisuke Suzuki, 52, as a board member, succeeding Hiroyuki Kometani, who resigned. Suzuki is executive vice president cum director of business strategy at ANA Holdings, which holds a 5.62% stake in Vietnam Airlines.