Thanks to record revenue and a large number of tourists, Vietnam Airlines has become the airline with the strongest growth in stock this year.
Bloomberg newspaper assessed: Vietnam Airlines has become the world's best-performing airline stock, as it has made huge profits after years of recovery from the COVID-19 pandemic.
Vietnam Airlines shares have surged 179% so far this year thanks to strong domestic and international travel demand. The airline’s shares are also outperforming its regional rival Singapore Airlines, which has only seen a 7.8% gain this year. Another rival, Air China, has seen its shares fall 3.7%.
According to a July 4 report from PYN Fund Management, one of Vietnam Airlines’ investors, the airline is expected to record “all-time highs in revenue and net profit” this year. The PYN report also predicted that Vietnam Airlines will see a surge in passenger numbers this year.
Vietnam Airlines’ story is no exception. Airlines across Southeast Asia, and Vietnam in particular, are also seeing demand rebound as key tourism markets in the region gradually return to pre-pandemic levels.
In particular, the amount tourist from China to Vietnam in the first 6 months of this year has tripled compared to the same period last year. As a Vietnamese airline operating many routes from China, Vietnam Airlines is benefiting greatly from this.
However, the airline remains cautious about the challenges ahead. In an interview last month, Vietnam Airlines Chairman Dang Ngoc Hoa shared about the macroeconomic instability facing the aviation industry, while affirming that Vietnam Airlines’ top goal is to both reduce losses and balance revenue and expenditure.
Still, the airline has ambitions to expand this year by adding direct flights to Southeast Asian and European countries. Vietnam Airlines is also adjusting flight frequencies and increasing capacity along key routes to keep up with tourist demand.
Vietnam Airlines’ recovery also comes at a time when Vietnam’s tourism industry is booming. According to Bloomberg research, the country’s tourism industry is expected to grow 6% this year and is expected to reach 6.5% by 2025.
Bloomberg analysts Tim Bacchus and Eric Zhu commented: “Vietnam’s ambition to attract foreign tourists is becoming a major growth driver for domestic airlines such as VietJet and Vietnam Airlines,” analysts say, with a target of 70 million international arrivals by 2045. “Vietnam could become the second largest tourist destination in Southeast Asia, after Thailand.”
According to the Civil Aviation Authority of Vietnam, the domestic aviation market is also experiencing significant growth, with passenger numbers expected to increase by 15% compared to 2023. Domestic cargo trade is also expected to increase by 8.5% compared to last year, according to the Civil Aviation Authority of Vietnam.
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