National carrier Vietnam Airlines expects 2020 losses of VND12 trillion ($521.11 million), about 17 percent lower than it had forecast in August.
The carrier’s consolidated revenue this year is estimated at VND42.5 trillion, with parent company revenues reaching VND33 trillion, exceeding targets set earlier this year by 4.8 percent and 1.4 percent respectively, Vietnam Airlines chairman Dang Ngoc Hoa said Tuesday at an extraordinary general shareholders’ meeting.
This allows the company to undershoot the VND14.45 trillion loss figure forecast at the annual general meeting in August, he said.
This year’s loss could be reduced further by VND2.86 trillion after completing adjustments for amortization of repair, maintenance and ground services costs in accordance with government policy that allows delayed payments to help support airlines, Hoa said.
In 2020, Vietnam Airlines operated about 96,500 flights, down more than 48 percent over last year. The airline transported 14.23 million passengers and about 195,000 tons of cargo, down 51 percent and 47 percent respectively over 2019, he said.
Hoa said that for the next five years (2021- 2025), Vietnam Airlines will focus on restoring production and business activities, undertaking a comprehensive restructuring plan which will overhaul areas such as capital ownership and finance, assets and portfolios. It will strive to ensure lean production, and improve business efficacy with the sale and leaseback of aircraft.
The national carrier will also wholly or partly divest its capital in a number of high-performing enterprises in the air-transport service supply chain to improve cash flow, offset accumulated losses, and create funds for investment and development, he added.
Vietnam Airlines currently operates more than 60 domestic routes with an average of 300 flights per day. It has resumed one-way flights to Japan and plans to reopen routes soon to mainland China, Taiwan, Laos and Cambodia.
In mid-November, Vietnam’s National assembly approved a bailout for the carrier that can see it get up to VND12 trillion in funds and will be allowed to sell more shares to existing shareholders to boost cash reserves.