Vietjet Aviation Joint Stock Company (HOSE code: VJC) has announced its business result for 2019’s 4th quarter. Accordingly, the airline’s revenue for air transportation in the 4th quarter stood at VND10,500 billion, an increase of 25%. This results in its 2019’s revenue and profit from air transportation standing at VND41,097 billion and VND3,936 billion respectively, increasing by 21.4% and 29.3% respectively compared to 2018. Vietjet’s revenue from sales & leaseback activity has been adjusted due to the airline’s revising its aircraft delivery from Airbus in 2019. The airline received 16 aircraft in 2018 while the number for 2019 was 7 aircraft, which results in the fact that Vietjet’s accumulated revenue and profit in 2019 stood at VND52,095 billion and VND5,010 billion respectively, a slight decrease compared to those for 2018.
To compensate for the delay in new aircraft’s delivery from Airbus, Vietjet carried out a lease of 9 aircraft, totaling its operating fleet to 78 aircraft with 321,000 aircraft operation hours and 139,000 flights. Its load factor stays at 87% with technical reliability rate being at 99.64%, which are among the top airlines in the Asia Pacific region. Vietjet has also been awarded the highest ranking for safety with 7-stars from AirlineRatings.com.
Application of advanced technology in its operation has been the key for Vietjet to speed up its process of improvement and sustainable development. The airline has completed transferring 80% of its data system to the Amazon Cloud, using the Flight Data Monitoring (FDM) program to effectively manage flight crew’s operation and support SFCO2 fuel control program. Thanks to the SFCO2 program, in 2019 Vietjet has saved more than 4.8 million kg of fuel and reduced 15.3 million kg of CO2 emissions.
The carrier’s growing business also attributes to its effective strategies on ancillary revenue management, including extra service fees, cargo transportation, inflight services (food, beverages & duty-free stuff) and advertisements. In 2019, Vietjet’s ancillary revenue was VND11,356 billion, up by 35.2% compared to 2018. The portion of ancillary revenue in the airline’s total air transportation revenue also increases from 25.4% in 2018 to 30% in 2019. Following the sustainability-focused model of low-cost carrier (LCC), ancillary revenue has become an important factor determining the success of Vietjet because of its profit margin of over 90%. According to the CarTrawler YearBook 2019 report, Vietjet was ranked 12th worldwide in terms of its ratio for ancillary revenue on top of total air transport revenue.
According to Vietjet’s consolidated financial report, the airline’s total asset in 2019 was VND47.608 billion with the owner’s equity being at VND17,661 billion including VND2,347 billion of treasury shares, an increase of 22% and 25.8% respectively against those in 2018. Its current liquidity was 1.4 while debt to equity ratio was 0.77, the lowest rate in Vietnam’s aviation industry. Vietjet’s EBITDAR margin was 31%, being ranked one of the top airlines in the world.
Vietjet’s new and modern fleet also become younger with the average age of 2.75 years and fuel-efficient. Especially, in September 2019, the airline received a A321neo ACF (Airbus Cabin Flex) aircraft with 240 seats, the first of its kind in the world. The new aircraft features fuel consumption savings by a minimum of 16%; noise reduction up to 75%; and emission reduction up to 50%. In 2020, the airline plans to take delivery of 9 more new A321neo aircraft and 20 more every year from 2021, which is expected to reduce fleet operation cost and increase the profit from air transportation and aircraft financing activities. Additionally, Vietjet continues to optimize its operation and management cost in order to enhance its air transportation business performance.
With modern fleet and expanding flight network all over Asia Pacific region, Vietjet’s growth potential is high considering also the fact that Vietnam is geographically located within the radius covering nearly half of the world’s population. This market segment is expected to create high currency income and good profit margin to the airline thanks to its growth in ancillary revenue and low fuel price.
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