Vietnam Airlines reports revenue boost in 2007

Dec 31, 2007, 8:03 GMT

Hanoi - Vietnam Airlines on Monday reported year-end revenues and profits slightly up over the previous year, despite high fuel prices and a chronic shortage of aircraft.

The state-run carrier posted total revenues of 1.27 billion dollars in 2007, up 15.5 per cent against the previous year. Pre-tax profits reached only 23 million dollars, though that figure was up 6.4 per cent, the company said in a statement released Monday.

Company officials argued that turning any profit was an achievement.

'This is an impressive development of Vietnam Airlines in 2007, especially in the face of the fierce competition in the international market and the rise in fuel prices,' general director Pham Ngoc Minh said.

The airline transported 8 million passengers, including 3.2 million international passengers, in 2007, and is targeting 9 million passengers in 2008, the company said.

'We will ensure sufficient planes and pilots, improve service quality and cut costs to enable Vietnam Airlines to improve its competitiveness and better meeting the rising demand on domestic and international markets,' Minh said.

The national flag carrier has had a rocky few years, first plagued by scandal in 2006 over officials using company money to send their children to school abroad and later a pilot arrested for smuggling in Australia.

And the airline had at least four emergency landings in early 2007, all due to technical difficulties, raising questions about the state of its fleet of aircraft that already was suffering a chronic shortage of planes to meet demands for new routes.

Now operating 47 aircraft, Vietnam Airlines plans to expand its fleet to 110 airplanes by 2020.

Earlier this year, the company signed contracts to purchase 10 Boeing 787 Dreamliners, 10 A350-900 and five ATR 72-500 planes.

According to its development strategy to 2020, Vietnam Airlines will need 15 billion dollars to purchase new planes and build and upgrade its infrastructure.

The national carrier will soon be facing new competition from the country's first private airline, VietJetAir, which plans to begin its commercial flights late next year.