Vietnam Airlines is restructuring its business to focus on its core business. This will involve withdrawing investments in stock, banking, real estate and other loss-making enterprises by 2015.
By following this plan, the airline hopes to save $25.2 million in order to help it achieve turnover of $ 43.5 billion and a profit of $0.63 billion in 2012-20. However that target is looking less achievable since the airline announced it would miss its business targets for this year due to increased competition from other carriers in both domestic and international markets. Vietnam Airlines only forecasts profits of $3.3 million after tax for the year – this is $14 million lower than earlier estimations. Fierce competition from Vietjet Air has been blamed for the poor performance as well as its $6 million spend to establish a reserve fund after its merger with Jetstar Pacific.
The airline’s initial public offering (IPO) slated for 2013 may now be in question.
Vietnam Airlines to focus on core business
