Vietnam Airlines at risk of being delisted after recording loss for 3 straight years

Vietnam Airlines has reported a loss for the third straight year, meaning that it could get delisted from the local stock exchange.  The airline reported a net loss of 10.37 trillion dong ($439.6 million) in the year ended December 2022, as per a report by Nikkei. The latest figures do not deviate much from the net loss of 13.28 trillion dong reported by the company a year earlier. Taking into account the last quarter results, the airlines reported a net loss of 2.59 trillion dong, double the year-earlier figure of 1.18 trillion dong. The airline, in which the  Vietnamese government has 86 percent stake, has received a warning regarding its potential delisting. According to Vietnamese law, a company gets delisted on the stock exchange if its cumulative loss outstrips its share capital or if it reports a net loss for three consecutive years. The company has started negotiations with the Ho Chi Minh stock exchange regarding the same. Vietnam Airlines seeks to avoid being delisted and believes that it will start recouping its losses in the year ending December 2023. “We are not a bad company and have the capabilities to recover earnings,” a Vietnam Airlines executive said to Nikkei Asia. The sales of Vietnam Airlines touched 70.58 trillion dong in the year ended December 2022, an increase of 150 percent from a year earlier.  International flights have been restarted by Vietnam Airlines gradually, and comprise 60 percent of the sales, leading to an increase in its revenue. But revival is not so simple. Further complicating the matter is the poor performance of Pacific Airlines, a low-cost carrier (LCC) subsidiary as well as the stiff competition the airline faces from VietJet Air (the largest LCC in Vietnam) and Bamboo Airways. However, it is still unknown whether Vietnam Airlines will be delisted. The Communist Party-led government, which has the majority stake, may bend the rules for it. But preventing the company’s removal from the bourses could impact Communist Party General Secretary Nguyen Phu Trong’s anti-corruption campaign, which demands that governmental businesses and bodies strictly comply with laws and regulations. An industry insider told Nikkei that the power of the securities commission has not been clearly defined, and “it will take a long time” before the stock exchange reaches a conclusion regarding the delisting. Read all the Latest News, Trending News, Cricket News, Bollywood News, India News and Entertainment News here. Follow us on Facebook, Twitter and Instagram.