Vietnam Airlines targets profit in 2026 despite soaring fuel costs

At its 2026 annual general meeting of shareholders on Sunday morning, shareholders approved the airline's 2026 business plan and development strategy, which aims to maintain profitability, although at a lower level than in 2025.

The national flag carrier plans to transport 27.73 million passengers and 361.4 million metric tons of cargo this year, representing increases of 8.1 percent and 6.2 percent, respectively, compared with 2025.

Its consolidated revenue is projected to reach VND138.9 trillion ($5.3 billion), up more than 12 percent year on year.

However, ongoing wars and geopolitical conflicts, along with a sharp surge in Jet A-1 aviation fuel prices, are expected to weigh heavily on earnings. 

Vietnam Airlines is targeting a pre-tax profit of VND101 billion ($3.8 million) for the parent company and VND510 billion ($19.5 million) on a consolidated basis.

Tran Van Huu, head of finance and accounting at Vietnam Airlines, told shareholders that fuel accounts for around 30 percent of the airline's total operating costs.

The company's 2026 business plan was based on an assumed average Jet A-1 price of $85 per barrel.

Jet A-1 fuel prices in the first quarter of 2026 remained close to forecasts, allowing Vietnam Airlines to post a consolidated profit of approximately VND4.5 trillion ($172 million), while the parent company recorded a profit of VND3.948 trillion ($151 million).

However, fuel prices began surging in March due to the conflict in the Middle East. Jet A-1 prices climbed to between $193 and $200 per barrel before easing to $151 per barrel during the March-May period.

With an average fuel price of $182 per barrel, the airline's fuel costs increased by nearly $100 per barrel above its original assumption, adding about VND7 trillion ($265.2 million) to its fuel costs during the second quarter.

Huu estimated that Vietnam Airlines would record a second-quarter loss of nearly VND2 trillion ($76.5 million) because of higher fuel costs.

Even so, the carrier is expected to post a first-half profit of around VND2 trillion ($76.5 million) in the first half of the year.

"If average fuel prices fall to around $120 per barrel in the second half of 2026, the airline will still be profitable, although earnings will be lower than in 2025," Huu said.

Le Hong Ha, president and CEO of Vietnam Airlines, said the airline had implemented cost-cutting measures similar to those used during the COVID-19 pandemic after fuel prices spiked because of the Middle East conflict.

The carrier reduced or suspended less profitable routes in April and May, cutting available capacity by about 20 percent before restoring operations in June as market demand recovered.

Vietnam Airlines also sought to maximize revenue during the crisis. As disruptions to European flight routes passing through the Middle East boosted demand for travel between Asia and Europe, the airline deployed larger aircraft, increased flight frequencies, and launched additional services to Europe. As a result, seat occupancy on its European routes reached 91 percent.

The airline is also implementing several long-term strategies to expand capacity, develop new markets, and improve operational efficiency.

In addition to the 50 Boeing 737-8 aircraft already ordered, Vietnam Airlines is arranging to lease 20 narrow-body aircraft to meet operational demand during 2027-28.

The carrier also expects to introduce its first dedicated cargo aircraft into service in the third quarter of 2026.

"We have also been working with aircraft manufacturers and leasing partners to purchase or lease 30 wide-body aircraft for delivery between 2028 and 2030," said Dang Ngoc Hoa, chairman of the board of directors of Vietnam Airlines.

Beyond fleet expansion, Vietnam Airlines is continuing to invest in technical infrastructure at key airports, including a major aircraft maintenance center, a general cargo terminal, and an express cargo terminal at Long Thanh International Airport.