Bamboo Airways aims to break even and become profitable by 2025

DNHN - On the morning of July 17, 2024, in Ho Chi Minh City, Bamboo Airways held its successful 2024 Annual General Meeting of Shareholders, reporting to shareholders on its 2023 operational results and outlining its 2024 business plans.

Recovery and growth

Mr. Phan Dinh Tue, Chairman of the Board of Directors of Bamboo Airways, reported on the company's 2023 business performance, restructuring results, and 2024 business plans, highlighting the company's growth recovery.

Despite a 19% reduction in the company's fleet compared to 2022 due to significant fleet restructuring, revenue from sales and service provision increased by 6% compared to 2022, reaching VND 12,392.9 billion. Seat occupancy rates rose to 87%, average passenger revenue increased by 14%, and ancillary revenue grew by 25%. Bamboo Airways reported a post-tax profit of VND 236.8 billion in 2023, compared to a loss of VND 19,798.4 billion in 2022.

The loss-to-total-revenue ratio decreased from 46% in 2022 to 29% in 2023. The company's total liabilities decreased by about VND 2,000 billion in 2023. As of now, Bamboo Airways no longer has outstanding aircraft lease payments.

Bamboo Airways has essentially completed its fleet restructuring phase, currently operating a single-fleet model with eight narrow-body A320/A321 aircraft.

To optimize operating costs, Bamboo Airways switched its ground service provider from SAGS HGS to Pacific Airlines and implemented self-service operations, saving 20% on ground handling costs per flight. The company also successfully negotiated to switch its Passenger Service System (PSS) from Amadeus to Navitaire, set to launch in April 2025, expected to save a minimum of USD 20 million (approximately VND 508 billion) over the next five years.

Accelerated development

In 2024, Bamboo Airways aims for total revenue of VND 4,857 billion and plans to reduce losses to VND 1,387 billion. The company intends to operate nine Airbus narrow-body aircraft, potentially increasing to 12 by the end of 2024 and 18 by the end of 2025, market conditions permitting. Bamboo Airways also aims to increase the average load factor from 81% to 85%, maintaining an average daily utilization of over 12 block hours per aircraft.

With the expanded fleet by the end of the year, Bamboo Airways plans to increase frequencies on existing routes, reopen domestic routes such as HCMC – Da Lat, HCMC – Thanh Hoa, HCMC – Phu Quoc, and consider resuming international routes like HCMC – Bangkok.

To meet operational needs, Bamboo Airways requires an additional VND 1,690 billion in capital in the last seven months of 2024, through fundraising solutions from credit institutions and domestic and foreign investors as per legal regulations.

At the event, the Annual General Meeting of Shareholders approved several key items with high consensus, including the 2023 profit distribution plan and the 2024 financial year profit distribution plan; the plan to select an independent audit firm for the company's 2024 financial reports; the policy to select investors and related work; changes in the number and titles of legal representatives, and amendments to the company charter. The shareholders' meeting also agreed to elect Vu Minh Tuan to the Supervisory Board for the 2023-2028 term.

Mr. Luong Hoai Nam, CEO of Bamboo Airways, stated: “Restructuring an airline is very challenging, but our goal is to make 2024 the last year of losses. We aim to break even and become profitable starting in 2025. Within three years, we plan to list the company on the stock exchange. These are ambitious goals, but the Board of Directors and the Executive Board are committed to striving to achieve these objectives, hoping that market conditions will be favorable for the company to achieve positive business results, bringing value to shareholders and numerous passengers.”

With solid progress following the first phase of restructuring and clear development strategies, Bamboo Airways is poised to continue rising and affirm its position in the aviation market.

Thien Minh