The national carrier is seeking $500 million government support as it is struggling amid the Covid-19 pandemic.
Vietnam Airlines is the second domestic airlines after Bamboo Airways to temporarily suspend Vietnam – South Korea flights to prevent the spread of Covid-19 epidemic.
Vietnam Airlines is the only local carrier awarded the foreign air carrier permit by the US Department for Transport.
The national flag carrier has revealed its second quarter’s business results with a VND51.6 trillion ($2.24 billion) in revenue, up 5.5 per cent on-year. Its pre-tax profit has nevertheless been down by almost 11 per cent on-year to VND1.65 trillion ($71.73 million).
The emergence of new airline and existing low-cost carriers has put the flag carrier of Vietnam in voluminous struggles, in terms of losing market share and experienced pilots.
Vietnam Airlines is struggling to retain its pool of qualified pilots amid the so-called excessive competition in the aviation industry, despite a heavy upfront cost poured into recruiting and training these pilots.
The average fuel price in the third quarter rose by 37.5 per cent over the same period, which caused the total cost of Vietnam Airlines to increase higher than its total revenue.
Within five years after being operated by Vietnam Airlines, Jetstar Pacific has never competed with VietJet Air and it also broke loss records even though its revenue has grown in line with the overall trend of the market.
Vietnam Airlines ascertained that the recruitment of Vietnamese pilots is in accordance with international standards and relevant matters of termination and reimbursement abide by prevailing laws.
The salary adjustment in early this month has become the strongest pay modification of Vietnam Airlines, in which the pilot’s salaries increase by 20 percent.
The majority of airlines operating expenses are fuel costs, which has increased 41 percent since the beginning of the year and it is predicted to continue increasing in the near future.
After an unsuccessful cooperation with Imex Pan Pacific Group and Noi Bai Airport Services Company, Vietnam Airlines is about to reopen its inflight duty-free service by cooperating with King Power, a “tycoon” of duty-free goods retail from Thailand.
Bamboo Airways may pose a risk of competition with Vietnam Airlines or Vietjet Air; however, this prospect will only happen as early as 2019.
In 2018, Vietnam Airlines will have its first non-stop flight to the United States, with a starting point of either San Francisco or Los Angeles.
