Vietjet is expected to stand firm with fast recovery and robust growth once the aviation market bounces back. — Photo courtesy of the airline
Vietjet Aviation Joint Stock Company (HoSE: VJC) recorded lower-than-expected loss of VND1.44 trillion (about US$62 million) for its air transport activities in the first half of 2020.
This was regarded as a positive result compared to the aviation industry as a whole due to impacts of the global pandemic, according to the company.
During the period, air transport brought Vietjet a revenue of over VND9.22 trillion (about $397 million), a decrease of 54 per cent year-on-year, the carrier's business results which were released on Monday revealed.
Vietjet posted consolidated revenue of VND10.97 trillion (nearly $473 million) in the January-June period, down 55 per cent year-on-year. Its post-tax consolidated profit in H1 stood at VND47 billion ($2 million).
Challenged by a decrease in cash flow from the air transport business, Vietjet took initiatives to transfer its investment portfolios and a number of assets to shore up its capital and cash as well as to keep the business afloat in preparation for the resilience of the aviation industry.
The airline’s total asset exceeded VND46.31 trillion ($1.99 billion) with the owner’s equity being at over VND17.31 trillion ($745 million) including treasury shares. Its current liquidity remained at 1.1 while debt to equity ratio stood at 0.57, which was among the lowest in the global aviation industry.
This allowed Vietjet to proceed with its mid- and long-term financing plans in order to strengthen its financial position.
Once the domestic market was reopened in June, the carrier resumed all of its domestic routes with 300 flights daily, a growth of three to five times of that recorded during the country’s pandemic peak.
Vietjet also launched eight new routes to meet rising domestic travel demand, increasing its total domestic flight network to 52 routes with overall flights operated reaching 14,000 flights.
In June alone, the airline carried up to 1.2 million passengers, marking an impressive recovery for the domestic market.
Meanwhile, Vietjet has been actively implementing cost-saving measures with an average cost drop of 55 per cent due to operation capacity reduction of between 30 per cent and 35 per cent and service cost decrease of between 20 per cent and 25 per cent.
In response to the COVID-19 pandemic, Vietjet has carried out several comprehensive solutions since early 2020 including expanding the cargo business, developing SkyBoss products and ancillary services, and offering the unlimited flight pass “Power Pass”. It has boosted cargo transport services since April, being the first airline in Viet Nam approved to deploy cargo operations in the passenger cabin (CIPC).
Vietjet has received a licence from the Civil Aviation Authority of Vietnam to launch its own self-service ground operations at Noi Bai International Airport. It would help the carrier to be more independent in operation while reducing costs and increasing ancillary revenue as well as improving its service quality.
With comprehensive resources being well-prepared, backed by low-cost carrier business model, Vietjet is expected to stand firm with fast recovery and robust growth once the aviation market bounces back if the carrier is granted support to improve its liquidity like other airlines in the world. — VNS