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With Huge Covid-19 Losses, Vietnam Airlines to Halve Staff Salaries, Sell Planes

Like all of us, Vietnam Airlines is having a rough year.

According to Dan Tri, the national flag carrier is expecting pre-tax losses of roughly US$650 million this year due to the coronavirus pandemic. Inbound international commercial flights have been suspended since late March, and while domestic demand is healthy, it is not enough to make up for the lack of long-haul travel. This figure was shared at VNA's August 10 shareholder general meeting, which had been delayed several times.

Through the rest of 2020, 18 million domestic passengers are expected to fly in Vietnam, about 90% of the same figure from 2019, while only a few international routes might resume in October, a situation which remains unclear given the global outbreak.

These massive financial losses follow a record 2019, in which VNA saw VND100 trillion (US$4.3 billion) in revenue. In response, the airline is taking aggressive action to stem further losses.

VnExpress reports that pilot and flight attendant salaries will be cut by roughly half. As a result, the average pilot salary would be reduced to VN77 million (US$3,315) per month, while flight attendants would see their average salary cut to VND13.8 million each month. The airline currently has 945 pilots, 130 of whom are foreigners.

Additionally, Dan Tri reports in another article that the airline is also looking into selling nine Airbus A321ceo aircraft from 2023 to 2024 in order to bring in some revenue. This follows unsuccessful attempts to sell two planes in June, and ongoing efforts to sell another six aircraft.

Given the current flight restrictions, 25 of VNA's planes will be redundant through the remainder of this year, and six will be redundant in 2021.  

[Photo via Vietnam Airlines]