Vietnam Airlines posts drop in profit

Business Desk
Viet Nam News
Publication Date: 15-07-2009

National flag carrier Vietnam Airlines is continuing to see a strong decline in pre-tax profit, which was just VND28 billion (US$1.6 million) in the first half of the year.

In first quarter alone, the carrier’s pre-tax profit was VND24 billion ($1.3 million). In the following three months, the airline earned just VND4 billion ($224,000).

This year’s figures are well down from the same period last year when the airline earned an average monthly pre-tax profit of VND20 billion ($1.1 million).

Vietnam Airline’s business in the first six months of this year was strongly affected by the world recession and the A/H1N1 flu pandemic, the carrier said.

Although revenue from domestic flights increased by 15 per cent in the first half of the year, the carrier only managed a total revenue of VND11.35 trillion ($630.5 million), equivalent to 48.09 per cent of its yearly target.

During the first six months of this year, Vietnam Airlines operated 32,319 flights, carrying more than 4.4 million passengers.

The volume of domestic passengers increased by 8.8 per cent over the same period last year, reaching more than 2.9 million passengers. However, the number of international passengers was 1.5 million, down 11.8 per cent from the same period last year.

"The drop in international passengers is caused by the decreasing volume of foreign visitors coming to the country. In the first half, this volume decreased by 20 per cent. Of those, the number of visitors using airlines was down by 11.6 per cent," the airline said. In the first half of the year, Vietnam Airlines seat occupancy rate was 72.5 per cent.

The airline carried 59,405 tonnes of cargo, 49.6 per cent of its yearly plan, representing a fall of 6.8 per cent over the same period last year.

The airline contributed VND124.2 billion to the State budget in the first half.

To offset costs, "in the next six months we will also improve our competitiveness and services to maintain our market share," the carrier said.

To save fuel, Vietnam Airlines has opened four new domestic routes since July, helping the company cut between four and 10 minutes off each flight and save $6-7 million in fuel costs.

In the next six months, the airline will also receive additional Government support.

Earlier, the Government approved projects to improve the quality of 10 airports.

Furthermore, the Government also gave the green light to Vietnam Airlines to buy an additional 32 Airbus, 11 Boeing and 11 ATR 72 planes.