According to Mr. Le Hong Ha, the shortage of aircraft due to engine problems – the main factor increasing ticket prices – may not gradually decrease until the end of next year.
The above information was shared by Vietnam Airlines CEO Le Hong Ha at the annual meeting of Vietnam Airlines Corporation, June 21.
Mr. Ha informed that due to the problem of the Pratt & Whitney engine used on the Airbus A321neo aircraft, Vietnam Airlines is having to stop operating these 11 narrow-body ships – the main aircraft of the airlines on the domestic flight network. Globally, about 3,500 Pratt & Whitney engines were recalled for inspection and maintenance. Therefore, the engine repair time extends from the usual 90 days to the current 250-300 days.
Vietnam Airlines CEO Le Hong Ha informed at the meeting on June 21. Image: HVN
According to Vietnam Airlines CEO, besides Pratt & Whitney, some engines used on wide-body ships such as the Airbus A350 and Boeing B787 are also affected and need maintenance. This airline may have to lay 2-4 Airbus A350 ships in the yard. Therefore, the total number of ships stopped operating by Vietnam Airlines in the coming time may be up to 13-15 ships.
Because the demand for aircraft in the world is still high, Mr. Ha predicts that the aircraft shortage will continue into 2025, and possibly until 2026 or 2027 before it can be resolved. Aircraft rental prices have increased by 20-30% compared to before. If companies order new ships from Airbus and Boeing now, it may not be delivered until 2030 or 2031.
Therefore, Vietnam Airlines is not in a hurry to sell 6 old Airbus A321ceo ships as planned last year. At this time, the company still prioritizes using old ships to have resources for exploitation.
However, the CEO of the national airline said that the company also continues to rebuild its plan to buy 50 narrow-body ships (both Boeing and Airbus) after 2030 to meet long-term development goals. At the same time, Vietnam Airlines is planning to exploit more regional jet fleets for niche routes or key airports like Con Dao to gradually replace the ATR-72 fleet.
In response to a shareholder’s question about whether Vietnam Airlines is interested in China’s Comac aircraft in the context of slow supply capacity of Boeing and Airbus, Mr. Ha said that “Comac is also currently a counterweight to other manufacturers.” The West”.
According to this CEO, Vietnam Airlines is still closely monitoring the development and licensing process of regulatory agencies with the C919 aircraft. Currently, Comac’s aircraft have only been licensed by Chinese aviation authorities and have not been certified by the US or Europe.
Two Vietnam Airlines A321neo aircraft were “grounded” in Noi Bai for engine repair in April 2024. Image: Mr. Tu
From the beginning of the year until now, the lack of aircraft, reducing the supply load, is one of the main reasons why domestic aircraft prices have increased. According to statistics from the Department of Aviation, domestic airlines are currently only operating 160-170 ships, while before the epidemic it was 230-240 ships.
Vietnam Airlines Deputy General Director Dang Anh Tuan said that Vietnam Airlines’ domestic ticket prices in the first 4 months of the year increased by about 15-17%. At one month ago, this level was equivalent to an average of 76% of the ceiling price. However, Mr. Tuan affirmed that many flight routes have lower rates, including some trips that cost only about 43% of the ceiling price.
This year, Vietnam Airlines sets the parent company’s revenue target at VND 80,984 billion, consolidated revenue at VND 105,946 billion. These are all the highest levels ever for this airline. At the time of peak revenue in 2019, the company only recorded revenue of about VND 72,980 billion and consolidated revenue of VND 99,099 billion.
However, the parent company’s expected profit is less than 1% of revenue, about 105 billion VND. The company forecasts that this year will continue to face many difficulties.
With macro factors, Vietnam Airlines said fuel prices still remain high – over 100 USD per barrel. When fuel prices increase by 1 USD per barrel, the company incurs flight operating costs of about 230 billion per year. The company is also concerned that the purchasing power of international visitors has not reached pre-pandemic levels because of the economic recession and political conflicts between Russia – Ukraine and Israel – Hamas that show no signs of cooling down. The most important international market – China is recovering very slowly.
Vietnam Airlines also reported that this year’s cash flow situation is difficult due to many restructured debts coming due, especially from July when refinancing loans begin to come due for repayment.
The national airline plans to divest capital from Tan Son Nhat Cargo Services Co., Ltd. (TCS) this year, helping to bring in about VND 1,700 billion in revenue. Thanks to this deal and the improved profits of other subsidiaries, the company sets a consolidated profit target of over VND 4,230 billion.