Vietnam Airlines (HVN) Cuts Chairman Salary 50%, Rotating Unpaid Leave as Fuel Costs Surge

Overview

Vietnam Airlines (HVN) is implementing emergency cost-cutting measures including rotating unpaid leave and a 50% salary cut for the Chairman due to soaring fuel prices, which have risen up to 100%. The airline is also optimizing flight routes and engine maintenance to reduce costs, signaling severe margin pressure for Vietnam’s flag carrier.

Key Facts

• Jet fuel prices have surged up to 100%, with some periods seeing a threefold increase.
• Vietnam Airlines has reintroduced rotating unpaid leave and salary cuts for leadership: Chairman salary reduced by 50%, Vice General Directors by 40%, and department heads by 30%.
• The airline is cutting investment projects and operational costs, similar to measures taken during the COVID-19 pandemic.
• HVN is working with air traffic control to use shorter flight routes due to reduced air traffic from conflicts.
• The airline is optimizing landing procedures at major airports and refueling at cheaper locations.
• Engine washing and digital transformation, including AI, are being used to improve fuel efficiency.
• HVN closed at VND 21,350 on May 15, 2026, up 0.47% with volume of 563,100 shares.

What Happened

Speaking at a forum organized by Tien Phong Newspaper on May 14, 2026, Mr. Dinh Van Tuan, Vice General Director of Vietnam Airlines and Chairman of Pacific Airlines, disclosed that the airline has immediately implemented a series of emergency measures to cope with the sharp rise in jet fuel prices. These measures mirror the austerity steps taken during the COVID-19 pandemic, including rotating unpaid leave for staff and significant salary reductions for top executives.

Mr. Tuan stated that the airline is also cutting investment projects and operational costs. In operations, HVN is taking advantage of reduced air traffic due to conflicts to request shorter flight routes, optimizing landing procedures, and refueling at countries with lower fuel prices. Technical measures such as engine washing and AI-driven route optimization are also being deployed to enhance fuel efficiency.

Market Context

HVN shares closed at VND 21,350 on May 15, 2026, up 0.47% on low volume of 563,100 shares. The stock has been under pressure due to rising fuel costs and weak travel demand. The aviation sector on HOSE is facing headwinds from global fuel price volatility and geopolitical tensions, which have increased operational costs for all airlines. HVN’s market capitalization remains sensitive to fuel price movements and passenger traffic recovery.

Strategic Significance

The emergency cost-cutting measures highlight the severe impact of fuel price volatility on Vietnam Airlines’ profitability. Fuel typically accounts for 30-40% of an airline’s operating costs, and a 100% increase in fuel prices can wipe out margins. The reintroduction of COVID-era austerity suggests that HVN expects high fuel costs to persist. The airline’s focus on operational efficiency and digitalization may provide some buffer, but the long-term outlook depends on fuel price normalization and the ability to pass costs to passengers without losing market share.

What to Watch

• Q2 2026 earnings release for HVN, expected in July, to quantify the impact of fuel costs on margins.
• Any government policy response, such as tax reductions on jet fuel, as discussed in the National Assembly.
• Global jet fuel price trends and OPEC+ production decisions.
• Passenger traffic data for domestic and international routes in the coming months.
• Updates on HVN’s restructuring plan and potential asset sales or capital raises.