Vietnam Airlines’ profit predicted to drop due to COVID-19 outbreak

The profit of Vietnam Airlines Corporation will be strongly affected by the spread of COVID-19 in countries around the world, according to the preliminary report of the Committee for Management of State Capital at Enterprises (CMSC).

The report was released as the corporation has had to cancel many flights to its key markets in Asia and Europe and spend money sterilising its service system to ensure safety for passengers.

It is predicted that the corporation’s revenue could drop 16 percent, or 12.5 trillion VND (538 million USD), compared with its plan this year, marking a loss of 4.3 trillion VND (while the profit plan is nearly 1.6 trillion VND). Therefore, it is difficult to complete the production and business plan previously approved by the CMSC.

It said that 17 companies, which contribute to the corporation’s capital, will also have a sharp decrease in revenue and corresponding profit. These companies’ pre-tax profit is estimated to fall by at least 320 billion VND, dividends profit sharing for the corporation will also drop by at least 250 billion VND.

CEO of Vietnam Airlines Duong Tri Thanh said the corporation is being directly affected by the COVID-19 outbreak, which is “unprecedented in aviation history.”

“The key markets of Vietnam’s aviation are all affected by the coronavirus. China has now closed, while the Republic of Korea and Japan, where are the two most important markets of Vietnam Airlines in Northeast Asia, are also suffering the spread of the COVID-19. The outbreak in Italy makes the European route very difficult,” Thanh said.

“Reduced ticket prices and increased operating costs due to sterilisation to ensure safety for passengers will erode the profit of Vietnam Airlines in 2020,” he added.

Thanh said the outbreak of COVID-19 has caused 40 percent of Vietnam Airlines aircraft to be ‘exposed to the sun’. Its 20,000 domestic and foreign employees are affected by the epidemic as the corporation applies unprecedented solutions including senior leadership salaries reduced by 40 percent and subordinate officials reduced by 30 percent, meanwhile employees rotate to be off work, foreign pilots take temporary leave and some representative offices are closed.

“The goal of Vietnam Airlines now is no longer about profits but cash flow and how to survive in the current context,” Thanh said.

Coping with the on-going COVID-19 epidemic, Vietnam Airlines said it would conduct sterilisation of all international flights to Vietnam. Flights that record passengers with abnormal health are also reported to the authorities and disinfected immediately.

Disinfection is carried out after the aircraft arrives at the apron. The entire cabin area, cockpit and flight attendant preparation area are disinfected. The most important areas for disinfection are places where there are many people contacting by hand such as luggage compartment locks, armrests on the seats and toilet door handles. Disinfection spray CH2200 is used according to the standards of functional health units, approved by the aircraft manufacturers for use on aircraft and does not affect passenger health.

To limit the spread of coronavirus, Vietnam Airlines takes body temperature measurements of all passengers departing from Europe before boarding and provides passengers with masks to use during the flight. Passengers are encouraged to stabilise their seats, limit movement and communication during the flight.

For domestic flights, Vietnam Airlines has conducted disinfection spray immediately after each flight at places where passengers are usually in manual contact. Used headsets are disinfected with Chloramin B solution. The equipment to serve passengers at Noi Bai and Tan Son Nhat international airports include ladders and passenger cars are also frequently cleaned with disinfectant solutions.

Source: Vietnam News Agency