Vietnam Airlines hopes to balance its revenue and expenditure in 2024 but faces a range of tough challenges.

Speaking at the company’s annual meeting in Hanoi, chairman Dang Ngoc Hoa says the present environment is characterised by high fuel prices and high US dollar interest rates, which affect exchange rates and the carrier’s cost base.

Vietnam Airlines

Source: Vietnam Airlines

Despite challenges, Vietnam Airlines hopes to balance costs and revenues in 2024

“In 2024, the aviation sector continues to face challenges such as macro-economic uncertainties,” says Dang.

“Based on business environment forecasts, Vietnam Airlines has set key objectives, directions, and tasks. The company will focus on restructuring assets, capital, investment portfolio, organisational structure and corporate governance reforms. The primary goal is to reduce losses and balance revenue and expenditure in 2024.”

Specific issues include overcapacity at airports and an inpsection and repair programme for Pratt & Whitney PW1100G engines, which has affected the the carrier’s operations. 

In 2023, the carrier saw consolidated revenue climb 30% to VND93 trillion ($3.6 billion), as the carrier transported over 24.1 million passengers, up 16.4% from a year earlier. Nonetheless, the carrier suffered a consolidated loss during the year of VND5.8. trillion.

To help it through 2023, the carrier introduced a comprehensive cost-management programme that reduced costs by about VND3.2 trillion.

Despite the challenges, Vietnam Airlines observes that the country continues to enjoy strong economic growth. The carrier aims to add new routes to Europe and Southeast Asia and adjust frequencies domestically to better meet demand.

Cirium fleets data indicates that Vietnam Airlines has 78 in-service aircraft, of which 42 are Airbus A321s. The airline also has nine in-service A321neos, with another 11 A321neos listed as in storage – all powered by the troubled PW1100G.

In addition, the carrier operates 12 A350-900s, with two more in storage, as well as 11 Boeing 787-9s and four 787-10s.

The carrier has just four aircraft on order: three 787-10s and a single A320neo. In September 2023, a fact sheet issued by the White House following a visit to the Southeast Asian nation by US president Joe Biden indicated that Vietnam Airlines would order 50 737 Max aircraft.