The national flag carrier Vietnam Airlines plans to optimize operational costs during the next two years when the aviation market recovers from the pandemic, eventually gaining profit in 2024.

The Covid-19 pandemic has caused severe impacts on the aviation market. Photo: Pham Hung

The airline revealed the plan in a report submitted to the Ho Chi Minh Stock Exchange (HoSE) on measures to improve its financial situation as the stock (HVN) continues to be placed under supervision for continual losses.

As of March 31, Vietnam Airlines posted an accumulated loss of VND24.5 trillion (US$1.05 billion) with a negative owner’s equity.

The airline aims to keep positive equity this year, which was mentioned in the restructuring plan until 2025.

For the 2023-2025 period, Vietnam Airlines would continue to work on improving its business performance and build up its equity for a gradual recovery.

Among the key solutions, Vietnam Airlines would continue to restructure its assets and investment portfolios to raise revenue, including the sale or lease of aircraft, and divest investment capital from different projects until 2024.

In late May, Vietnam Airlines announced the sale of 35% of its stake at Cambodia Angkor Air in a deal worth $35 million and said it would sell the remaining 14% stake later this year.

The airline also takes steps to issue shares to investors in the 2023-2024 period. Last September, Vietnam Airlines issued 800 million shares to existing shareholders to raise nearly VND8 trillion ($344.5 million).

Following this move, the State remains Vietnam Airlines’ largest shareholder, holding 86.34% stake via the Commission for State Capital Management (CSCM) of 55.2% and the Government investment arm State Capital Investment Corporation (SCIC) (31.14%), followed by the Japanese aviation company ANA Holdings (5.62%).

In the past months, Vietnam Airlines’ operation has been positive thanks to the strong recovery of the domestic market. In May, Vietnam Airlines Group (including Vietnam Airlines, Pacific Airlines, and VASCO) operated nearly 12,000 flights with around two million passengers, exceeding 42% of the target.

The airline is looking to resume international flights, but such efforts have been hampered by the ongoing conflict between Russia and Ukraine and rising fuel prices.