Tue Jul 15, 2008 12:07pm BST
HANOI, July 15 (Reuters) - Flag carrier Vietnam Airlines said on Tuesday it made a loss of $5 million during the first half of this year after high oil prices forced it to spend more than its revenue.
The Hanoi-based unlisted airline, Vietnam's largest, posted revenue of 12.1 trillion dong ($733 million), 28 percent up from the same period last year, but expenses hit 12.18 trillion dong, leading to the loss, it said.
High oil prices since the start of the year made it pay $124.84 for a barrel of flight fuel, 38 percent above the airline's initial estimate.
"Prices of flight fuel rising high have seriously affected Vietnam Airlines' business," the company said.
It carried more than 4.43 million passengers during the first six months of 2008, 15 percent higher than the same time last year. Nearly 1.8 million of them were foreigners, up 11 percent from a year earlier, the company said.
Vietnam Airlines also carried 63,600 tonnes of cargo, an increase of 17 percent, and its seat occupancy rate rose to 75.96 percent from 75.4 percent in the whole of 2007.
In January the carrier said it would hire an international consultant within the first quarter to advise on its initial public offering and could sell up to 20 percent of its shares to three foreign strategic investors.
But the plan has been delayed and the airline has yet to revise the IPO timetable.
Another plan by the airline to open direct flights to the United States in late 2008 will also fail due to growing competition and the difficulty of supervising air safety, an official at the Vietnam Civil Aviation Department said last week. ($1=16,509 dong) (Reporting by Ho Binh Minh; Editing by Erica Billingham)