Vietjet reports positive third quarter results

Hanoi (VNA) - Vietjet Aviation Joint Stock Company (HOSE: VJC) has released its third quarter financial statement, seeing a slight increase in air transport revenue over that of the previous quarter despite the second outbreak of COVID-19 in Vietnam.

The pandemic has caused a fundamental impact on the airline’s core business, air transportation, with its revenue being posted at 2.802 trillion (approx. 120.8 million USD) with a post-tax loss of 926 billion VND (approx. 39.9 million USD). The consolidated third quarter results report the revenue at 2.809 trillion VND (approx. 121.1 million USD) and a post-tax loss of 971 billion VND (approx. 41.8 million USD).

The results turn out to be better than expected, and are deemed positive compared to other airlines in Vietnam and the world.

The airline’s total asset is 45.269 trillion VND (approx. 1.99 billion USD) with the owner’s equity being at 16.329 trillion VND (approx. 745 million USD) including treasury shares. Its current liquidity ratio remains at 1.14 while debt to equity ratio is staying at as low as 0.74, which are among the lowest in the global aviation industry. It allows Vietjet to proceed with its mid- and long-term financing plans in order to strengthen its financial position. The airline’s capital flows are also significantly increased thanks to the full resumption of its domestic flight network.

During the third quarter, Vietjet has operated up to 15,000 safe flights, serving more than 3 million passengers in the domestic market. The airline also operated 32 international flights, bringing 7,440 stranded Vietnamese back home from Japan, the Republic of Korea (RoK), Taiwan, Indonesia, Brunei and the Philippines strictly in line with safety regulations of the Ministry of Health and the aviation authorities.

Regarding commercial flights, Vietjet has acted swiftly to reopen international routes to Tokyo (Japan), Seoul (RoK) and Taipei (Taiwan) since September 29 when the pandemic has been put under control in Vietnam and a number of countries in the region. During the first nine months of this year, the airports were notably no longer overloaded with Vietjet’s On-time Performance (OTP) reached an average of 91 percent and the aircraft reliability rate at 99.64 percent.

Vietjet has constantly introduced various big promotion campaigns and many products bringing new values to the customers during this period. In September, the airline has also launched a completely brand new ticket class called Deluxe in addition to the current SkyBoss and Eco classes. They come with attractive benefits and privileges specifically designed for different customer segments in order to meet the travelling demand of the passengers, diversify the airline’s customer base and increase sales and generate extra revenue.

Vietjet has also initiated new business ventures including the self-handling ground operations at the Noi Bai International Airport to optimize operating costs, independently monitor its operations and facilitate extra ancillary revenue at the airport as well as to better manage service quality.

The airline has been proactively carrying out cost-saving measures like optimizing operating costs per block hour and constantly negotiating with various suppliers which so far has helped to cut expenses according to flight hours. All in all, Vietjet’s operating costs are down by between 50-70 percent.

Vietjet has applied at the State Bank of Vietnam asking to launch the e-wallet services, as well as to implement the loyalty program.

The Government’s support has lifted great pressure off the domestic airlines with the introduction of Circulars 10/2020/TT-BGTVT on September 1, 2020. Accordingly, Vietjet and other domestic airlines are granted a 50-percent fee waiver for flight operating services and especially for take-off and landing and ground operations until the end of 2021. The Government has also waived the environmental protection tax on jet fuel as well as to offer preferential loans for the airlines. It has certainly helped Vietjet to reduce costs and strengthen its internal strength for a robust recovery post COVID-19.

Vietjet’s results in the third quarter of 2020 is seen as one of few bright spots on the global aviation map that mostly goes dark in the COVID-19 pandemic.

Third quarter financial statements of several airlines all point to big losses. Experts, however, believe the aviation industry has hit rock bottom in third quarter and will begin its recovery in fourth quarter. The US carrier American Airlines reports quarterly revenue of 3.2 billion USD, a decrease of 73 percent year-on-year. Another US carrier Southwest Airlines posts a quarterly revenue of 1.8 billion USD, down by 68.2 percent year-on-year. The UK’s British Airways, meanwhile, said it had to cut a majority of flights and brought most of it operations to a halt.

As the domestic market is now in full swing, Vietjet, being well prepared with comprehensive resources and backed by low-cost carrier business model, is expected to stand firm followed by fast recovery and robust growth once the global aviation market bounces back./.