International aviation flourishes
International Airlines Group (IAG), the parent company of Aer Lingus and British Airways, has just announced a profit of 1.26 billion euros (equivalent to nearly 1.4 billion USD) in the first half of this year, compared to a loss of 490 million USD in the first half of 2022.
As a result, IAG's net debt has fallen to $8.36 billion as of June 30, 2023, while it is expected to reach nearly $11.5 billion as of December 31, 2022.
This year, the group expects to reach capacity close to 2019, or about 97% of pre-Covid-19 levels, said Luis Gallego, CEO of International Airlines Group.
“Customer demand remains strong, especially for leisure travel. About 80% of the group’s revenue in the third quarter of 2023 will come from pre-booked tickets. Our airlines have made plans to support operations during the busy summer season,” said Luis Gallego.
Meanwhile, AirFrance-KLM Group's revenue in the first two quarters of this year stood at 7.6 billion euros (equivalent to nearly 8.4 billion USD), net debt decreased by 1.54 billion USD compared to the end of 2022, despite inflation.
"The situation at airports is much better. This year is a 'test run' for 2024, when France will host the Olympic and Paralympic Games, for which Air France is an official partner," said Benjamin Smith, CEO of the Group.
Qatar Airways also reported a net profit of $1.2 billion in the 2022/2023 financial year. The group's total revenue increased to $21 billion, up 45% from last year.
Notably, passenger revenue increased by 100% compared to 2022 thanks to a 31% increase in capacity and a load factor of 80% - both the highest in Qatar Airways' history, leading to a sustainable increase in market share.
This figure was achieved because last year, Qatar hosted the World Cup. The World Cup brought a significant increase in passenger numbers for Qatar Airways, as it was the official airline of the tournament, carrying 1.4 million passengers to the event.
Thanks to that, in the first 6 months of the year, the airline transported 31.7 million passengers, an increase of 71% compared to last year.
In the US, United Airlines and other airlines are also seeing strong revenue growth, with 40% coming from international flights and growing faster than domestic revenue. For example, United Airlines reported total revenue of nearly $14.2 billion in the second quarter of 2023, up 17% from a year earlier. In addition, a 26% lower fuel bill also boosted United’s profits.
Delta Air Lines posted record revenue of $14.6 billion, up 19% from the first half of the year. President Glen Hauenstein predicted that with strong demand for travel in the third quarter, the airline's revenue would continue to increase by 11-14% year-on-year.
According to Reuters , global airlines forecast that in 2023, the industry's profits will more than double, to $9.8 billion compared to $4.7 billion previously, thanks to strong travel demand and lower oil prices.
The International Air Transport Association (IATA) said that industry-wide revenue is expected to reach $803 billion, up 9.7%, approaching the pre-pandemic level of 2019 ($838 billion).
However, IATA also warned that delays in delivering aircraft to cope with increased demand could undermine airlines' ability to recover from the pandemic.
Domestic aviation is not out of trouble yet
Contrary to the optimistic trend of international aviation, domestic airlines still record many difficulties.
According to data just released by Vietnam Airlines on July 31, in the second quarter, the airline recorded a total revenue growth of 12.3% from sales and service provision compared to the same period last year, reaching VND20,696 billion. This is the 7th consecutive quarter that Vietnam Airlines' revenue has increased compared to the same period last year.
After deducting the cost of goods sold, the company recorded a gross profit of VND929 billion in the second quarter of 2023. This is also the second consecutive quarter of gross profit for the corporation. In the first 6 months of the year, the corporation achieved a revenue of more than VND44,000 billion, an increase of 47% over the same period; gross profit reached nearly VND2,900 billion.
However, due to seasonality as well as financial risk factors and input costs such as fuel prices, exchange rates, interest rates, etc., the corporation still has no profit after tax.
After accounting for all expenses, Vietnam Airlines lost 1,331 billion VND after tax in the first half of this year.
Due to the delay in submitting the 2022 audited financial report by more than 45 days compared to the prescribed deadline, more than 2.2 billion HVN shares of Vietnam Airlines have been restricted from trading since July 12, and have been put on warning since July 11.
Also facing many difficulties, 2022 is the first year Vietjet Air (VJC) reported a loss, with a loss after tax of more than VND 2,171 billion, compared to a profit of nearly VND 122 billion in 2021.
However, the situation is more positive for this airline when in the second quarter of 2023, Vietjet recorded revenue and profit from air transport reaching VND 12,522 billion and VND 72 billion, up 10% and 101% respectively; consolidated revenue and profit after tax reached VND 16,872 billion and VND 214 billion, up 46% and 18% over the same period in 2022.
In the first 6 months, Vietjet recorded consolidated revenue of VND29,770 billion, up 87% and completing 60% of the yearly plan. Ancillary revenue maintained high growth, reaching VND9,000 billion, double the same period and contributing 40% of total revenue. Consolidated profit after tax reached VND387 billion, up 167% over the same period.
As of June 30, 2023, Vietjet's total assets reached more than VND 71.5 trillion, debt/equity ratio of 1.2 times and liquidity ratio of 1.5 times. Cash and cash equivalents at the end of the second quarter of 2023 reached VND 2,165 billion,
This growth was achieved thanks to the airline of billionaire Nguyen Thi Phuong Thao boosting international flights, transporting 3.5 million passengers, accounting for more than 50% of international passengers to Vietnam on domestic airlines. In addition, fuel costs were optimized thanks to the new fleet, with fuel prices decreasing by about 40% compared to the same period.
As for Bamboo Airways , from 2022 until now, the airline has still faced many difficulties. Bamboo Airways Joint Stock Company had a net loss of more than 17,600 billion VND in 2022 and negative equity of 835 billion VND. Vietravel Airlines is not yet a public company, so financial data is only disclosed to its shareholders. Having had a rough start due to the Covid pandemic, Vietravel has been quite cautious so far, not expanding its fleet or market to gain market share. Vietravel Airlines' parent company, Vietravel, has requested to withdraw capital and separate from this airline since mid-2021. By the fourth quarter of 2022, Vietravel continued to reduce its ownership at Vietravel Airlines to only 13.7%. |
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