In a Bloomberg article about Vietnam’s national carrier, the publication leads with the headline, “Surprise Profit Makes Vietnam Airlines (HoSE: HVN) the World’s Best-Performing Airline Stock This Year.” Despite facing bankruptcy risks, the airline has bounced back from the pandemic and is soaring once again.
With a 179% surge in its stock price so far in 2024, Vietnam Airlines has outperformed its regional peers, such as Singapore Airlines and Air China. This impressive turnaround has been driven by the rebounding travel demand, positioning the airline for its first profitable quarter after over four consecutive years of losses.
Vietnam Airlines soars to new heights with its impressive performance.
According to PYN Fund Management, one of the few institutional investors in the company, Vietnam Airlines is on track to achieve its “highest-ever revenue and profit turnaround” this year.
As Southeast Asian airlines witness a rebound in demand, Vietnam Airlines is well-positioned to capitalize on the returning tourist markets, especially with the tripling of Chinese tourists in the first half of the year compared to 2023. As the largest domestic carrier operating these routes, Vietnam Airlines is set to benefit immensely.
Navigating Challenges
Despite its recent success, Vietnam Airlines remains vigilant about the challenges facing its business. In a statement last month, the airline’s chairman, Dang Ngoc Hoa, acknowledged the “macroeconomic uncertainties” the industry faces while adding that their primary goal is to reduce losses while balancing revenue and spending.
However, the airline has ambitious expansion plans for 2024, including adding new routes to Southeast Asia and Europe. They are also adjusting flight frequencies and increasing capacity on key routes to “capitalize on the demand.”
Vietnam is eyeing long-term growth in the tourism sector, and according to a Bloomberg survey, it is considered one of the key industries to propel the country’s economy, which is already growing at an impressive 6% this year and is expected to reach 6.5% by 2025.
Vietnam Airlines expands its horizons with new routes.
Analysts Tim Bacchus and Eric Zhu from Bloomberg Intelligence highlight that Vietnam’s ambition to boost its popularity among foreign tourists will be a key growth driver for domestic carriers like Vietjet and Vietnam Airlines.
With a target of 70 million international visitors by 2045, Vietnam aims to become the second-largest tourism destination in Southeast Asia after Thailand.
The domestic aviation market is also witnessing significant improvements, with a projected 15% increase in passenger numbers this year compared to 2023, according to Vietnam’s Civil Aviation Authority. Domestic cargo trade has also increased by 8.5% year-on-year.
Despite its recent surge, Vietnam Airlines remains a small player in the industry, with a market value of 76 trillion dong ($3 billion). This is just half the size of Australia’s Qantas Airways and a fifth of Singapore Airlines.
In late June, the National Assembly authorized the State Bank of Vietnam to automatically extend the repayment period for the remaining refinancing loans provided to credit institutions lending to the Vietnam Airlines Corporation (Vietnam Airlines) to support its production and business activities.
The extension period for each time is equal to the initial refinancing period, and the total extension period shall not exceed five years (including the two extensions previously granted under Resolution No. 135/2020/QH14)
Vietnam Airlines sees promising results in its quest for financial balance
By the end of 2023, this business has incurred a total loss of over 5.8 trillion VND despite a 30% increase in revenue.
Dizzying experience for passengers as flights at Tan Son Nhat Airport are forced to reschedule
Due to inclement weather, a number of flights from Tan Son Nhat Airport in Ho Chi Minh City to various provinces and cities have been delayed, causing inconvenience to waiting passengers.
Increase flight frequency to Dien Bien during the Lunar New Year holiday Giap Thin.
To meet the high demand of passengers during the Tet holiday, Vietnam Airlines will be increasing the frequency of flights on the Hanoi – Dien Bien route. Specifically, there will be additional flights on February 7th – 8th, 2024 (equivalent to the 28th – 29th day of the 12th lunar month, Year of the Cat) and from February 12th – 15th, 2024 (equivalent to the 3rd – 6th day of the 1st lunar month, Year of the Horse).
How did Vietnam’s two biggest airlines perform in 2023: One made a profit of over 300 billion, while the other incurred losses of over 5,000 billion
Vietnam Airlines and Vietjet Air, two leading airlines in Vietnam, have recently released their financial reports for the year 2023.
Thousands of additional flights, high prices for Tet holiday airfares remain unchanged
Vietnamese airlines have leased 15 aircraft, bringing the total to nearly 3,000 flights to serve the peak Tet holiday season. However, many popular flights still have exorbitantly high ticket prices.
