Vietnamese airlines recovering in 2023

Vietnam Airlines and Vietjet Air reported profits again in the first quarter of this year, while Bamboo Airways neared the break-even point, thanks to the Tet travel peak.

Vietnam Airlines and Vietjet Air reported profits again in the first quarter of this year, while Bamboo Airways neared the break-even point, thanks to the Tet travel peak.

Analysts said increased international flights due to Vietnam’s Lunar New Year holiday festival (Tet) in late January were the cause of the uptick in the previously-ailing air industry.

According newly released financial statements, Vietnam Airlines posted a consolidated pre-tax profit of VND19.3 billion (US$817,800) in the first quarter of this year, compared with a loss of VND2.6 trillion in the first quarter of last year.

The gains halted the streak of 12 loss-making consecutive quarters since Covid-19 emerged.

The national flag carrier’s revenues doubled to VND23.64 trillion, the highest since the beginning of 2020 and close to the pre-pandemic levels of 2019.

A manager at Vietnam Airlines said the better business performance mainly stemmed from the company’s effective tapping of Tet holiday travel, and the recovery of international flights, especially to and from China.

In markets such as the U.S., Europe and Australia, the airline gained high seat occupancy rates.

After incurring losses in 2022, Vietjet Air made a pre-tax profit of VND243 billion in the first quarter of this year. That figure came out of a consolidated revenue of VND12.9 trillion, its highest revenue in the last 12 quarters.

Vietjet Air’s revenue from the international market increased, accounting for 45% of its total revenue from passenger transport.

Among domestic airlines, Vietjet Air has pioneered opening new routes to India, Kazakhstan and Australia since the second half of last year.

Vietjet operated 31,300 flights, transporting nearly 5.4 million passengers in the first quarter, up 57% and 75% respectively.

Meanwhile, the number of passengers transported by Vietnam Airlines surged by 63% to 5.1 million.

Domestic carriers’ improved performance was also partly due to lower fuel prices and exchange rate differences.

In the last quarter of last year, both Vietnam Airlines and Vietjet operated below cost as the fuel price of Jet A1 and interest rates were high. The price of jet fuel last year sometimes exceeded $160 per barrel and averaged $130.

According to Vietnam Airlines, the average price of Jet A1 fuel in the first three months of the year downed to US$110.69 per barrel.

Bamboo Airways has not announced business results in the first quarter of this year. At an extraordinary shareholder meeting in early April, Bamboo Airways chairman Nguyen Ngoc Trong said the airline was close to breaking even in the first quarter, with its fleet of 30 aircraft operating at full capacity.

He said Bamboo Airways "will get off the ground in 2024 and be profitable from 2025." Bamboo Airways is expected to obtain 6-8 new aircraft in the coming months to expand its international flight network.

Bamboo Airways is working with partners in China to open new routes from now to the end of the third quarter. Meanwhile, it will increase the frequency of many routes to Southeast Asia and Northeast Asia in the second half of the year.

Vietjet Air will get more new wide-body and narrow-body aircraft, increasing the total to 87 by the end of this year, and launch new routes to India, Japan and South Korea.

Vietravel Airlines plans to receive 3 more aircraft to double its fleet.