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Vietnam Airlines’ share value soars, becomes best-performing airline stock  

Vietnam’s national carrier Vietnam Airlines has reportedly seen a remarkable turnaround in its fortunes in the past 12 months and is looking positively to the future, says one of the airline’s main institutional investors. From being on the verge of bankruptcy just a few months ago, shares in the carrier are now outperforming every other airline in the world, according to market analysts. 

The soaring share price is being driven largely by a surprise return profit since the start of 2024 said the investor, PYN Fund Management in a statement issued on July 4, 2024. The airline’s finances have seen a welcome boost as travel to Vietnam has picked up rapidly since the pandemic, along with a cost-cutting program at the carrier that has begun to take effect on the company’s bottom line.  

In 2023, Vietnam Airlines recorded total consolidated revenues of VND 93,265 billion ($3.7 million) – nearly 30% higher than the previous year and approaching pre-pandemic peak levels.  

Shares in the predominantly state-owned carrier have surged so far in 2024 by a staggering 179%, albeit starting from a very low base. Profitability has been a stranger to the airline in the past four years so its first-quarter return to the black took many investors by surprise. However, this change of fortunes is one the airline is hoping to capitalize upon going forward. 

Vytautas Kielaitis / Shutterstock

One only has to go back to the end of 2023 and the start of 2024 to see an airline at serious risk of insolvency and facing the ignominy of being delisted from the Ho Chi Minh Stock Exchange. However, with its share price now riding sky-high, stock in the company is now outperforming that of its far greater local rivals. For example. shares in Air China have fallen 3.7% since the start of 2024, and those in Singapore Airlines have risen by just 7.8%.  

In the PYN Fund Management statement, Vietnam Airlines expects to record an “all-time high revenue and turnaround in profit” for FY2024. Indeed, experts at financial analytics firm Huyen Tran awarded PYN’s investment in Vietnam Airlines as its ‘stock of the month’ for June 2024.  

Vietnam Airlines currently operates a fleet of 97 aircraft according to ch-aviation. This is comprised of 41 A321s, 20 A321neos, 14 A350-900s, 11 787-9s, four 787-10s, and six ATR72s. Additionally, the carrier took delivery of its first A320neo on July 8, 2024.   

On the back of its newfound position as a profit-making airline, the airline’s board is wasting no time in planning for future growth to capitalize on surging demand for air travel both within Vietnam as well as elsewhere in the region. The airline is said to hold ambitions to expand throughout the remainder of 2024 by adding to its existing route network across Southeast Asia and points within Europe. 

The carrier is also making tweaks to its frequencies on its best-performing routes and increasing capacity where possible to capitalize on the rise in overall demand for its services.  

KITTIKUN YOKSAP / Shutterstock

However, the airline’s board is said to be wary of its positive position and cautious not to get carried away amid ongoing challenges facing its business. The Bangkok Post reported that in a statement issued in June 2024, the carrier’s Chairman Dang Ngoc Hoa cited “macroeconomic uncertainties” still faced by the industry as posing an ongoing threat, adding that the carrier’s primary goal was to reduce losses while balancing revenue and spending. 

Despite these uncertainties, airlines across Southeast Asia are enjoying a period of booming travel demand as both key tourist markets and business travelers have returned to international travel. According to the Bangkok Post, traffic from China which was traditionally the biggest market for inbound international visitors to Vietnam has tripled since the same stage of 2023, and Vietnam Airlines has boosted capacity on flights to the Chinese mainland to better match supply with demand.  

The post Vietnam Airlines’ share value soars, becomes best-performing airline stock   appeared first on AeroTime.

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