Vietjet reports loss of over 2.1 trillion VND for H1
Hanoi (VNA) - Vietjet Aviation
Joint Stock Company has reported a loss of over 2.11 trillion VND (approx. 90.5 million USD) in air
transportation business in the first half
of this year.
The company on
August 2 released its business result of 2020’s
second quarter, the period that saw the most impact by the COVID-19 pandemic.
By the end of Q2,
amid the COVID -19 pandemic, Vietjet
records air transport revenue at 1.97 trillion VND (approx. 84.5 million USD), a decrease of 54 percent year-on-year, and a
loss of over 1.12 billion VND (approx. 48 million USD).
To support its cash
flow, Vietjet has proactively sought partners and implemented many financial
solutions such as asset transfer and financial investment, which resulted in a
financial revenue of 1.174 trillion VND (approx. 50.4 million USD) with a post-tax
consolidated profit of 1.063 trillion VND (approx. 45.6 million USD) in Q2, and consolidated
profit of 73 billion VND (approx. 3.2 million USD) in the first half, increasing
financial resource for the airline’s air transport business. These results were
achieved thanks to the solid financial base, which the company has accumulated
for the past years.
As Vietnam opened its
sky for domestic operation in June, Vietjet resumed all of its domestic flight
network 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 travel
demand, increasing its total domestic flight network to 52 routes with overall
flight operated reached 14,000 flights. Its total passenger carriage reached
1.2 million passengers, marking a positive recovery for the domestic market in
June.
With the cost optimisation advantages
following the models of LCCs worldwide, Vietjet has been proactively
implementing cost-saving measures with an average cost drop of 55 percent due to operation
capacity reduction of 30 – 35 percent and service cost decrease around 20 – 25 percent. Especially in May, Vietjet successfully stocked up
on fuel when the fuel price was low, leading to a cost reduction of 25 percent compared to the
market price. In addition, the carrier was also in talk with suppliers for a
reduction of 20 percent up to 45 percent of charge for airport handling, technical activities
and other services.
Aiming to become a
new-age carrier, Vietjet has been stepping up commercial solutions based on 4.0 technology
platform and mobile application development. Thanks to its tech-based cost
optimisation capacity, the airline has seen an effectiveness
when following LCC model, which has been proven to be the right choice for the
past economic crises.
The airline’s total
asset is 48.39 trillion VND (approx. 2.075 billion USD) with the owner’s
equity being at 17.339 trillion VND (approx. 745 million USD) including treasury
shares. Its current liquidity is kept at a good rate at 1.4 while debt to
equity ratio is 0.57, which are among the lowest rates in the global aviation
industry. It allows Vietjet to proceed with its long-term financing plan in
order to enhance its internal resources for fighting the current pandemic.
Being active on
measures to weather COVID-19 pandemic, Vietjet has implemented many solutions
since early 2020, including expanding the cargo transportation business,
developing SkyBoss product and ancillary services, and offering “Power Pass” and the unlimited flight
pass. In addition, the carrier also started self-service ground operation at
Noi Bai International Airport in Hanoi to be more active in operation, reduce
costs, increase ancillary revenue, and especially improve passenger quality
services. In particular, Vietjet has also worked on many solutions to increase
revenue and optimise operations. It has boosted cargo transport service
since April, being the first airline in Vietnam to gain the government’s
approval to deploy cargo operations in the passenger cabin (CIPC).
Apart from the effort
of 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 tax
exemptions for flight fuels, financial support, and extension of payment
term./.