14:07 (GMT +7) - Friday 24/05/2019

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Vietnam Airlines eyes low-cost segment

Released at: 18:27, 11/05/2019

Vietnam Airlines eyes low-cost segment

Photo: Ngoc Lan

Carrier to purchase 50 narrow-body aircraft in 2021-2025 period, AGM hears.

by Ngoc Lan

Vietnam Airlines aims to take advantage of the low-cost segment’s potential and purchase 50 narrow-body aircraft during the 2021-2025 period, according to a plan approved at its annual general meeting (AGM) held on May 10 in Hanoi.

The national flag carrier has identified the low-cost segment as the future of the airline industry as growth has been very high in recent times. It will therefore adopt key strategies to promote the segment.

The purchase of a large number of aircraft will give it a host of advantages in negotiating prices and incentives.

It also plans to liquidate five A321ceo aircraft produced in 2004-2005 for between $3 million and $9 million each. The sale is considered feasible as there are many other carriers interested in buying the aircraft.

Mr. Pham Ngoc Minh, Chairman of the Board of Directors, said that despite the aviation market continuing to face many challenges there is an opportunity for Vietnam Airlines to affirm its position in the aviation sector in particular and in the business community in general. “We will focus on implementing the tasks assigned at the AGM, in particular ensuring absolute safety, continuing the program of fleet upgrades, and improving corporate governance towards sustainable growth,” he added.

Under the 2019 business plan approved at the AGM, the carrier will strive to reach a target of more than 24.9 million passengers. Consolidated revenue is to be over VND111.7 trillion ($4.8 billion), of which the parent company will record VND82.5 trillion ($3.5 billion). Consolidated pre-tax profit is targeted at VND3.4 trillion ($146 million), of which the parent company will record nearly VND2.7 trillion ($116 million).

Consolidated revenue reached a record in 2018, at approximately VND100 trillion ($4.2 billion), or 1.9 per cent higher than planned. Consolidated pre-tax profit was VND3.312 trillion ($142.1 million), exceeding the plan by 36.8 per cent. The parent company contributed VND73.227 trillion ($3.1 billion) to revenue and VND2.418 trillion ($103.7 million) to pre-tax profit, exceeding the target set at the 2018 AGM by 23.4 per cent.

Vietnam Airlines’ shares (HVN) officially listed on the Ho Chi Minh Stock Exchange (HSX) on May 7, with a reference price on the first trading day of VND40,600 ($1.74).

It successfully conducted over 141,300 flights last year, carrying nearly 22 million passengers.

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