Vietjet Air aircraft (Photo courtesy of Vietjet Air)
Hanoi (VNA) - Vietjet AviationJoint Stock Company has reported a loss of over 2.11 trillion VND (approx. 90.5 million USD) in airtransportation business in the first halfof this year.
The company onAugust 2 released its business result of 2020’ssecond quarter, the period that saw the most impact by the COVID-19 pandemic.
By the end of Q2,amid the COVID -19 pandemic, Vietjetrecords air transport revenue at 1.97 trillion VND (approx. 84.5 million USD), a decrease of 54 percent year-on-year, and aloss of over 1.12 billion VND (approx. 48 million USD).
To support its cashflow, Vietjet has proactively sought partners and implemented many financialsolutions such as asset transfer and financial investment, which resulted in afinancial revenue of 1.174 trillion VND (approx. 50.4 million USD) with a post-taxconsolidated profit of 1.063 trillion VND (approx. 45.6 million USD) in Q2, and consolidatedprofit of 73 billion VND (approx. 3.2 million USD) in the first half, increasingfinancial resource for the airline’s air transport business. These results wereachieved thanks to the solid financial base, which the company has accumulatedfor the past years.
As Vietnam opened itssky for domestic operation in June, Vietjet resumed all of its domestic flightnetwork with 300 daily flights, a triple to five times growth compared to the figures at the country’s COVID-19 pandemic peak.The airline also launched eight new routes to meet rising domestic traveldemand, increasing its total domestic flight network to 52 routes with overallflight operated reached 14,000 flights. Its total passenger carriage reached1.2 million passengers, marking a positive recovery for the domestic market inJune.
With the cost optimisation advantagesfollowing the models of LCCs worldwide, Vietjet has been proactivelyimplementing cost-saving measures with an average cost drop of 55 percent due to operationcapacity reduction of 30 – 35 percent and service cost decrease around 20 – 25 percent. Especially in May, Vietjet successfully stocked upon fuel when the fuel price was low, leading to a cost reduction of 25 percent compared to themarket price. In addition, the carrier was also in talk with suppliers for areduction of 20 percent up to 45 percent of charge for airport handling, technical activitiesand other services.
Aiming to become anew-age carrier, Vietjet has been stepping up commercial solutions based on 4.0 technologyplatform and mobile application development. Thanks to its tech-based costoptimisation capacity, the airline has seen an effectivenesswhen following LCC model, which has been proven to be the right choice for thepast economic crises.
The airline’s totalasset is 48.39 trillion VND (approx. 2.075 billion USD) with the owner’sequity being at 17.339 trillion VND (approx. 745 million USD) including treasuryshares. Its current liquidity is kept at a good rate at 1.4 while debt toequity ratio is 0.57, which are among the lowest rates in the global aviationindustry. It allows Vietjet to proceed with its long-term financing plan inorder to enhance its internal resources for fighting the current pandemic.
♎ Being active onmeasures to weather COVID-19 pandemic, Vietjet has implemented many solutionssince early 2020, including expanding the cargo transportation business,developing SkyBoss product and ancillary services, and offering “Power Pass” and the unlimited flightpass. In addition, the carrier also started self-service ground operation atNoi Bai International Airport in Hanoi to be more active in operation, reducecosts, increase ancillary revenue, and especially improve passenger qualityservices. In particular, Vietjet has also worked on many solutions to increaserevenue and optimise operations. It has boosted cargo transport servicesince April, being the first airline in Vietnam to gain the government’sapproval to deploy cargo operations in the passenger cabin (CIPC).
Apart from the effortof the airline itself, the support of the government has also helped reduce the pressure and boost the aviation sector’s recovery. Following airlines’proposal, the Government and industry authorities has considered support packages,including exemption of taxes, fees, aviation services, environmental taxexemptions for flight fuels, financial support, and extension of paymentterm./.
