Uncertainties continue for airlines

Business results posted for the fourth quarter and 2021 as a whole showed a clear improvement in Vietnam’s aviation market in 2021, but forecasts for 2022 cast doubts over continued growth.

In the fourth quarter of last year, Vietnam Airlines recorded revenue of more than VND9.2 trillion ($402.1 million), an increase of more than VND1 trillion ($43.72 million) compared to the same period of 2020, bringing revenue for the year as a whole to VND28.093 trillion ($1.26 billion). A representative from the national flag carrier said the easing of regulations on entry and medical isolation created the conditions needed for airlines to restore regular routes and significantly improve cash flow and profits.

Mr. Tran Doan The Duy, General Director of the Vietnam Tourism and Transport Marketing Joint Stock Company (Vietravel), said the tourism industry has been almost paralyzed since the outbreak of Covid-19. Vietravel lost more than VND256 billion ($11.2 million) last year, triple the figure in 2020.

As for Bamboo Airways, according to the FLC Group’s consolidated financial statements, as of the end of 2021 it held 21.7 per cent of shares in the carrier and had suffered an allocation loss of VND501 billion ($21.9 million), which means that Bamboo Airways incurred losses of some VND2.3 trillion ($100.76 million).

Vietjet Air, meanwhile, recorded consolidated revenue of VND2.789 trillion ($112.18 million) in the fourth quarter of 2021, down 37 per cent, and an after-tax loss of VND93 billion ($4.07 million). Thanks to financial revenue of VND3.92 trillion ($171.56 million), or four-fold higher year-on-year, it posted a net profit of VND100 billion ($4.4 million); a sharp increase of 46 per cent compared to 2020.

Although three of Vietnam’s four major airlines reported losses in 2021, they appear to be coping well with the pandemic given that many international carriers are seeing major losses.

However, although air transport is resistant to many shocks and the Russia-Ukraine conflict is unlikely to affect long-term growth in air transport, analysts have expressed concern about associated risks.
In addition, the price of jet fuel rising to a multi-year high is also hindering the recovery of airlines around the world and in Vietnam.