Vietjet aircraft (Source: VNA)Hanoi (VNA) - Vietjet AviationJoint Stock Company (HOSE: VJC) has released its thirdquarter financial statement, seeing a slight increase in air transport revenueover that of the previous quarter despite the second outbreak of COVID-19 inVietnam.
The pandemic has causeda fundamental impact on the airline’s core business, air transportation, withits revenue being posted at 2.802 trillion (approx. 120.8 million USD) with apost-tax loss of 926 billion VND (approx. 39.9million USD). The consolidated third quarter results report the revenue at 2.809trillion VND (approx. 121.1 million USD) and apost-tax loss of 971 billion VND (approx. 41.8million USD).
The results turn out to be better than expected, and are deemed positivecompared to other airlines in Vietnam and the world.
Theairline’s total asset is 45.269 trillion VND (approx. 1.99 billion USD) withthe owner’s equity being at 16.329 trillion VND (approx. 745 million USD)including treasury shares. Its current liquidity ratio remains at 1.14 whiledebt to equity ratio is staying at as low as 0.74, which are among the lowestin the global aviation industry. It allows Vietjet to proceed with its mid- andlong-term financing plans in order to strengthen its financial position. The airline’scapital flows are also significantly increased thanks to the full resumption ofits domestic flight network.
During thethird quarter, Vietjet has operated up to 15,000 safe flights, serving morethan 3 million passengers in the domestic market. The airline also operated 32international flights, bringing 7,440 stranded Vietnamese back home from Japan,the Republic of Korea (RoK), Taiwan, Indonesia, Brunei and the Philippinesstrictly in line with safety regulations of the Ministry of Health and theaviation authorities.
Regardingcommercial flights, Vietjet has acted swiftly to reopen international routes toTokyo (Japan), Seoul (RoK) and Taipei (Taiwan) since September 29 when thepandemic has been put under control in Vietnam and a number of countries in theregion. During the first nine months of this year, the airports were notably nolonger overloaded with Vietjet’s On-time Performance (OTP) reached an averageof 91 percent and the aircraft reliability rate at 99.64 percent.
Vietjet has constantlyintroduced various big promotion campaigns and many products bringing newvalues to the customers during this period. In September, the airline has alsolaunched a completely brand new ticket class called Deluxe in addition to thecurrent SkyBoss and Eco classes. They come with attractive benefits andprivileges specifically designed for different customer segments in order tomeet the travelling demand of the passengers, diversify the airline’s customerbase and increase sales and generate extra revenue.
Vietjet has alsoinitiated new business ventures including the self-handling ground operationsat the Noi Bai International Airport to optimize operating costs, independentlymonitor its operations and facilitate extra ancillary revenue at the airport aswell as to better manage service quality.
The airline has beenproactively carrying out cost-saving measures like optimizing operating costsper block hour and constantly negotiating with various suppliers which so farhas helped to cut expenses according to flight hours. All in all, Vietjet’soperating costs are down by between 50-70 percent.
Vietjet has applied atthe State Bank of Vietnam asking to launch the e-wallet services, as well as toimplement the loyalty program.
The Government’ssupport has lifted great pressure off the domestic airlines with theintroduction of Circulars 10/2020/TT-BGTVT on September 1, 2020. Accordingly,Vietjet and other domestic airlines are granted a 50-percent fee waiver forflight operating services and especially for take-off and landing and groundoperations until the end of 2021. The Government has also waived the environmentalprotection tax on jet fuel as well as to offer preferential loans for theairlines. It has certainly helped Vietjet to reduce costs and strengthen itsinternal strength for a robust recovery post COVID-19.
Vietjet’s results in thethird quarter of 2020 is seen as one of few bright spots on the global aviationmap that mostly goes dark in the COVID-19 pandemic.
Third quarter financialstatements of several airlines all point to big losses. Experts, however,believe the aviation industry has hit rock bottom in third quarter and willbegin its recovery in fourth quarter. The US carrier American Airlines reports quarterlyrevenue of 3.2 billion USD, a decrease of 73 percent year-on-year. Another UScarrier Southwest Airlines posts a quarterly revenue of 1.8 billion USD, downby 68.2 percent year-on-year. The UK’s British Airways, meanwhile, said it hadto cut a majority of flights and brought most of it operations to a halt.
As the domestic marketis now in full swing, Vietjet, being well preparedwith comprehensive resources and backed by low-cost carrier business model, isexpected to stand firm followed by fast recovery and robust growth once theglobal aviation market bounces back./.
VNA
