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Vietnam Airlines losing $10 mln a year on domestic routes
National carrier Vietnam Airlines said it is incurring losses of around US$10 million every year operating domestic service as many flights outside key routes are unprofitable, news website VietNamNet reported Friday.
General Director Pham Ngoc Minh said it is almost impossible to recoup operating expenses for flights to provinces that attract little tourism. According to the airline, launching a new route now can translate to an annual loss of at least $1 million.
Other local carriers like Jetstar Pacific and Indochina Airlines only focus on key routes linking Hanoi, Ho Chi Minh City and famous tourist cities, VietNamNet said.
Meanwhile, state-owned Vietnam Airlines is operating 35 domestic routes and it plans to start offering flights to new destinations this summer, including Vinh and Chu Lai, both in the central region.
Minh said Vietnam Airlines needs financial support from local administrations and businesses so that it can launch more new routes.
The carrier’s overall operation is profitable. It posted pre-tax profits of US$8.1 million last year, down from $14 million a year earlier due to the global recession.
Thanh Nien
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