Vietnam Airlines extends losing streak

National flag carrier Vietnam Airlines recorded a loss before tax of VND2,621 billion ($113 million) in the first quarter of 2022, after eight consecutive quarters of losses.

The Q1 loss is down 46% year-on-year. Consolidated revenue was VND11,683 billion ($504.4 million), up 55%, the highest since Q2/2020 when the pandemic began to wreak havoc on the aviation sector.

Despite the gradual revenue recovery, Vietnam Airlines continued to report losses due to the lingering effects of the pandemic and the Russia-Ukraine conflict.

The rising price of oil forced the carrier to incur an extra VND465 billion ($20 million) in jet fuel expenses compared to its plan, accounting for 30% of total air transport costs.

As of March 31, Vietnam Airlines had accumulated losses of more than VND24,500 billion ($1.06 billion), and negative equity of VND2,160 billion ($93.2 million), facing the risk of delisting if no actions to restore capital flows.

Vietnam Airlines once successfully avoided delisting from the Ho Chi Minh Stock Exchange (HoSE) by increasing its chartered capital by VND8,000 billion ($345 million) through the issuance of 800 million shares to its existing stakeholders last September.

"With the predicted recovery level as well as management and operational solutions actively applied, Vietnam Airlines can basically retain liquidity till the end of the year," a Vietnam Airlines leader stated.

The airline added that it is deploying drastic solutions in business operations to mitigate the impact of the pandemic, as well as leverage the support of partners and suppliers to ensure uninterrupted operations.

"Our business activities have progressively stabilized, and we are preparing for the future development and recovery phase," Vietnam Airlines said in a release.

The State Securities Commission recently requested Vietnam Airlines to publicize its 2021 annual report, 2021 audited financial statement, and Q1/2022 financial report as opposing its calls for a delay.

The corporation, in a recent request to the regulator, said it had been affected by the pandemic until the beginning of 2022, and many of its staff members have had to work under social distancing conditions. "Therefore, the carrier must prioritize finishing its 2021 audited financial statement, and could not complete the financial report for the first quarter of this year as scheduled."