Covid-19 ‘erodes’ Vietnamese airline profits
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Covid-19 ‘erodes’ Vietnamese airline profits

Covid-19 has caused a series of airlines to go from profit to loss in the first quarter. The biggest impact in the industry is Vietnam Airlines Corporation (Vietnam Airlines).

Vietnam Airlines’ total revenue from sales and service provision only reached about 18,900 billion VND, down more than 6,800 billion VND compared to the same period in 2019. Of which, the main decrease in service provision revenue was (about 29.4 billion VND).

In the same situation, Vietjet Air’s first quarter revenue decreased by 30% compared to the same period last year, down to only VND 7,222 billion.

Airlines’ planes `lay waiting` at Tan Son Nhat airport during the social distancing period last month.

During difficult times, the two aviation giants have had to cut costs in many ways.

In addition, Vietjet started self-service ground service at Noi Bai airport to be proactive in operations, increasing auxiliary costs at the airport.

Similarly, Vietnam Airlines cuts all expenses that are not really urgent, postpones possible expenses, negotiates to reduce prices for signed contracts… This enterprise also restructures labor,

Not as heavy a loss as Vietnam Airlines or Vietjet, but the revenue of aviation support service providers has also plummeted.

Bank for Investment and Development of Vietnam Securities Joint Stock Company (BSC) stated that in the second quarter, the impact of epidemic prevention measures on aviation will be more severe when the entire international flight network stops operating, the

According to BSC, with previous similar epidemics such as MERS and SARS, it took 6-7 months to recover passenger output.

Besides the airlines, the revenue of Taseco Aviation Services Joint Stock Company (Taseco Airs) specializes in providing aviation services and meals at major airports such as Noi Bai, Tan Son Nhat, Da Nang, Phu Quoc.

Meanwhile, the best performing business in the group of aviation businesses at the beginning of this year is still Vietnam Airports Corporation (ACV).

According to a report from the Civil Aviation Authority, in the first quarter, the number of passengers passing through airports only reached 24 million, down 12.4% compared to the same period in 2019. Of which, international passengers reached 7 million, down 31.6

However, domestic airlines like Vietjet are hoping that the aviation industry will quickly recover when Vietnam begins to control the epidemic.

Vietnam Airlines is also asking to speed up the process of purchasing 50 more aircraft to get ahead of the post-epidemic recovery trend.

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