Vietjet: Remarkable growth despite bustling Vietnamese aviation market
Vietjet’s business results in the first half of 2019 has been commendable, with air transport’s revenue at VND20,148 billion, an increase of 22 per cent over the same period last year. It resulted in pre-tax profit of VND1,563 billion, marking an increase of 16 per cent year-on-year.
Consolidated revenue including the business results earned from the trade of aircrafts, reached more than VND26.3 trillion, an increase of 24 per cent. Pre-tax profit was nearly VND2.4 trillion, equal to an 11 per cent year-on-year increase.
During the last six months, Vietjet operated 68,821 flights, equivalent to 45 per cent of total flights operated by all other Vietnamese airline carriers. The number of flights meant Vietjet had transported 13.5 million passengers on all routes operated by the carrier. Vietjet maintained its leading position in domestic transportation with a 44 per cent market share in the first six months of the year. Vietnam Airlines was second with 34 per cent.
Vietjet’s potential growth in the international market is still extensive, thanks to good profit margins from ancillary revenue and low fuel cost. Growth in international markets earned Vietjet a sound increase in foreign currencies. The number of passengers on international routes operated by Vietjet grew by 35 per cent, with nearly 4 million passengers. Revenue of international transport service surpassed domestic’s to reach 54 per cent of total Vietjet’s airway transport revenue. Ancillary and cargo revenues were more than VND5.5 trillion, increasing from 21 per cent last year to 27 per cent this year, thanks to the growth of international route operations.
During the first six months of the year, Vietjet launched nine new international routes to Japan, Hong Kong, Indonesia, China and three other domestic routes. These newly-opened routes brings Vietjet’s routes around the world to 120 comprising 78 international routes and 42 domestic ones. Vietjet’s flight network now covers a number of destinations in Vietnam, Japan, Hong Kong, Singapore, South Korea, Taiwan, Thailand, Myanmar, Malaysia, Cambodia, China, etc. Vietjet is also flying to many airports around the world, including in Dubai and Doha.
During the period under review, Vietjet’s revenue passenger kilometers (RPK) was 16.3 billion, increasing 22 per cent year-on-year. Its load factor was averagely 88 per cent, technical reliability was 99.64 per cent and on-time performance (OTP) reached 81.5 percent.
Vietjet’s equity reached VND15,622 billion, increasing 32 per cent over the same period last year. Vietjet’s total assets are valued at nearly VND44.5 trillion, an increase of 30 per cent year-on-year; of which more than VND21.9 trillion are long-term assets, accounting for 49 per cent of total assets. Debt to equity ratio was 0.50, which was positive compared to 0.64 of last year. The Annual General Shareholders’ Meeting in April decided to pay the 2018 dividend at the rate of 55%, higher than the planned rate of 50% approved at the annual shareholders’ meeting last year.
During the last six months, Vietjet also introduced a new version of Vietjet Air apps which integrated Vietjet SkyClub membership with many incentives and utilities including buying air tickets quickly on smartphones, offering VND0 tickets every Friday and free payment fees, etc.
Vietjet Aviation Academy at Ho Chi Minh City High-Tech Park located in Ho Chi Minh city is an international standard, modern training facility, using equipment and training programs under European Union Aviation Safety Agency (EASA) standards. It has organized 250 courses for 5,623 pilots, cabin crews, engineers, aviation staffs. The Simulator (SIM) Centre at Vietjet Aviation Academy has started operation since November 2018. So far it has been trained 3,178 hours for 2.809 trainees and teachers. Vietjet’s SIM Center has obtained ATO level 2 certification from EASA, the world’s leading standards.
Vietjet is one of the few foreign enterprises and the only Vietnamese organization to become a member of the Japan Business Federation – Keidanren, an organization with members comprising global Japanese companies. On the same day, Facebook also became a member of Keidanren. Vietjet was also honored as one of the top listed companies in Vietnam in 2018.
With positive business results, regional and worldwide flight network expansion, together with the ability to manage costs and operation quality, Vietjet expects to maintain positive growth in the next three years, reported the Board of Management at the Annual General Shareholders’ Meeting. Vietjet will continue its leading position in term of domestic transport and effectively focus on international routes expansion. Vietjet also considers opportunities to invest in infrastructure, terminals, technical services, ground services, training and promoting efficiency, which are advantages of the airline at the same time with its expansion in the aviation segment.