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Vietnam Air profits plunge

Vietnam Air profits plunge

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A security guard watches over two Vietnam Airlines aircraft at Hanoi airport. Vietnam’s national carrier - a stakeholder in Cambodia Angkor Air - says it is looking to become the hub for travel to the Kingdom. AFP

Vietnam looks to become Cambodia hub

THE director of Vietnam Airlines’ representative office in Japan, Nguyen Quoc Tuan, has said that Vietnam hopes to establish itself as a hub for onward travel to Cambodia. Speaking at the inauguration Tuesday of the airline’s new route between Hanoi and Osaka in Japan’s second-largest city, Nguyen added that Vietnam also hoped to serve a similar role for Laos, according to a Vietnam News Agency report Wednesday. Thailand has traditionally served as the main gateway to the Kingdom, but political protests closed Bangkok’s main airport, Suvarnabhumi, at the end of 2008, an event that prevented some passengers from travelling on to Siem Reap and Phnom Penh. Vietnam overtook South Korea
to become the main source of arrivals to Cambodia last year, but many of these were via overland routes rather than flights, according to official government statistics. Overall air arrivals fell 2.84 percent for the first 11 months of 2009. On Wednesday, Van Ha, section manager for Vietnam Airlines in Cambodia, declined to offer a breakdown of how the decline in air travel had hit the carrier’s operations in the Kingdom during 2009, adding that the airline would release results next week. Cambodia Angkor Air – the Kingdom’s new national carrier, which is part-owned by Vietnam Airlines – said last month it had already turned profitable following its launch at the end of July. STEVE FINCH

HANOI – Vietnam Airlines profits tumbled 42 percent year-on-year as the state-owned flag carrier was hit by the effects of the global recession and swine flu outbreak.

The airline’s pre-tax profit fell to US$8.1 million last year, down from $14 million a year earlier, it said late Tuesday.

The carrier also cited “epidemic outbreaks” for its profit fall, an apparent reference to the global A (H1N1) swine flu pandemic.

But the airline noted it had still posted profits as other international airlines suffered losses in 2009, one of the worst years on record for airlines following the global economic crisis.

“Vietnam Airlines still earned profits” while increasing its fleet and opening new domestic routes, it said.

VNA’s revenue for the year reached $1.3 billion, against $1.56 billion reported a year earlier. The 2009 figure was four percent higher than the target, it said.

The airline said it transported 9.3 million passengers – up from 8.8 million the previous year. One third of the passengers were foreigners, it said.
Vietnam Airlines is targeting 11 million passengers this year.

The International Air Transport Association, an industry group, has said global passenger demand is expected to grow this year after a fall during a difficult 2009 for the industry.

Shares of Asia’s largest carrier, Japan Airlines (JAL), have plunged this week on fears the carrier is preparing for a court-backed bankruptcy filing.

Vietnam Airlines said it was due Wednesday to begin direct flights to Osaka five times a week to replace previous cooperative flights with JAL.

Vietnam Airlines expects to triple its fleet of 50 aircraft by 2020, and officials have said it is seeking to become one of the region’s leading carriers.

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