US route not yet fully funded but very important

Speaking at the 2024 Annual General Meeting of Shareholders on the morning of June 21, Mr. Le Hong Ha, General Director of Vietnam Airlines, said that the airline's aircraft are in short supply.

In particular, the Pratt & Whitney (PW) engine recall on Airbus aircraft has caused VNA to stop operating 11 aircraft, and is expected to stop operating 6 more by the end of the year. Due to the 250-300 day repair and maintenance period, the aircraft shortage is expected to last until the end of 2024 and gradually decrease by mid-2025.

Mr. Le Hong Ha, General Director of Vietnam Airlines

The airline has taken measures to address the shortage of aircraft such as restructuring routes, reducing off-peak routes to switch to peak hours and more efficient routes. In particular, the airline continues to open new routes. Currently, international routes have also returned, except for some routes to Russia, Myanmar, etc.

According to Mr. Le Hong Ha, it is expected that around October, the airline will open a flight route to Munich, evaluate resources to open a flight route to Milan in March 2025, and consider a Northern European flight route at the end of 2025.

“International flight revenue grew strongly compared to 2023 with an increase of 45%, contributing 65% of the airline's total revenue and returning to nearly 2019 levels. International flights are bringing efficiency and profit to VNA in the first half of the year,” said Mr. Ha.

However, currently, flights to China - a large and important market for VNA as well as Vietnamese aviation - are recovering more slowly than expected. In the first 5 months of the year, the Chinese market decreased by about 55% compared to before the Covid-19 pandemic. The airline is considering gradually reopening flights to China in the near future, such as the Chengdu route.

With flights to Japan, the number of Japanese tourists to Vietnam has only reached 60% compared to 2019. This is an important market for Vietnamese tourism and VNA but is recovering slowly.

With the US route officially opened by the airline in 2022, according to Mr. Ha, "this is an important route in terms of politics and society, cherished and built after more than 20 years of evaluation". In terms of finance, the route to San Francisco (USA) has not reached the cost of the total cost.

“Long-haul flights are still a big challenge for airlines due to the high level of competition. However, the contribution of US flights to VNA is quite important, bringing good results when other routes have not recovered,” said Mr. Ha.

Notably, with the C919 aircraft line recently researched and produced by China, according to the CEO of Vietnam Airlines, this is an aircraft manufacturer that is a rival to European aircraft manufacturers.

“VNA is interested in this aircraft model, has established a working project team and closely follows the process of applying for licenses on the standards of this aircraft model to meet world safety standards,” Mr. Ha emphasized.

The CEO of Vietnam Airlines also said that in 2023, the aviation industry will continue to face many obstacles from geopolitical conflicts that disrupt supply chains, fuel prices remaining high at over 105 USD/barrel, and unfavorable fluctuations in interest rates and exchange rates.

Domestically, the slowing domestic economy has led to a decline in travel demand this year. The bright spots are the positive growth of the Australian and Indian markets, and the strong recovery of the Southeast Asian market.

Vietnam Airlines achieved remarkable business results in 2023. Vietnam Airlines Group transported more than 24.1 million passengers and 230,000 tons of cargo, up 16.4% and 5.8% respectively over the same period.

Positive operating results helped the company achieve VND93,265 billion in consolidated revenue, nearly 30% higher than the same period in 2022 and approaching the peak in 2019. The consolidated loss before tax decreased by VND5,583 billion, half that of 2022.

Source: https://thanhnien.vn/ceo-vietnam-airlines-duong-bay-my-chua-dat-du-chi-phi-nhung-rat-quan-trong-185240621105844076.htm