Vietnam Airlines posts heavy losses due to Covid-19

By Viet Dung

A Vietnam Airlines aircraft. National flag carrier Vietnam Airlines has announced in its Q1 financial report that its first quarter losses were higher than its 2019 profits - PHOTO: VIETNAM AIRLINES

The national flag carrier and its subsidiaries made VND18.8 trillion in net revenue in the first three months, dropping by 26% year-on-year, the lowest in three years, according to its financial report.

Even though the airline slashed its sale expenses and management costs by 40%, it still sustained over VND2.7 trillion in lost revenue.

However, thanks to proceeds from the sale of fixed assets and inventories, its after-tax loss was reduced to VND2.6 trillion, while it booked net profit of VND2.5 trillion in 2019.

The carrier frequently earned high profits in the first quarters of the past few years due to strong air travel demand during the Lunar New Year holiday (Tet).

Due to the impact of Covid-19, the disease caused by the new coronavirus, its average revenue from domestic passenger transport has fallen by 29%, while the international passenger transport revenue has dipped by 34%, stated Vietnam Airlines.

Apart from this, its members, including the Vietnam Airport Ground Services Company, Skypec and Vietnam Airlines Caterers, have been hit hard by the coronavirus pandemic.

Working capital for the carrier’s operations is expected to edge down by VND15 trillion this year.

Reports from the State capital management committee showed that under increasing financial pressure, banks will not be able to continue offering loans to Vietnam Airlines and its members.

As such, the carrier has asked the Government to provide VND12 trillion in financial aid.SGT