In a remarkable display of resilience and strategic prowess, Vietjet Aviation Joint Stock Company (HoSE: VJC) has masterfully navigated the turbulent skies of the global airline industry, nearing its annual revenue target with an impressive 95% achievement rate within the first nine months of 2023. This is a testament to the airline’s robust international network expansion and unwavering commitment to excellence.
The third quarter of 2023 has proven to be a quarter of triumph for Vietjet, as it has not only operated a staggering 36,000 flights safely but also transported an impressive 6.8 million passengers. This includes a notable 2.3 million international travellers, marking a 10% increase from the same quarter in pre-pandemic 2019 and an astounding 127% YoY growth.
Vietnam’s airports were bustling with activity, welcoming 23.7 million international passengers in the first nine months of 2023, showcasing a skyrocketing 267% YoY increase. Among the airlines from Vietnam carrying the banner high, Vietjet transported 11.5 million travellers, with a substantial 51% (5.9 million) choosing Vietjet for their travel needs. This played a pivotal role in bolstering inbound tourism and international investment, further solidifying Vietjet’s position as a leader in the aviation industry.
Boasting a fleet of 103 aircraft, including 18 operated by Thai Vietjet and two brand new additions slated for delivery, Vietjet has reported a high average seat utilisation rate of over 85% and a technical reliability rate of 99.72%. This highlights the airline’s operational efficiency and reliability, crucial factors in today’s competitive airline market.
In cargo transport, Vietjet flexed its muscles, reaching a total transported cargo volume of 20,300 tonnes, a significant 76% YoY increase. This represents 23% of the cargo market share among Vietnamese airlines, showcasing Vietjet’s versatility and capability in meeting diverse market needs.
Vietjet’s international routes have played a vital role in contributing to the bilateral development of tourism, trade, and investment, supporting economic recovery. In Q3/2023 alone, the airline expanded its horizons by adding seven new international routes, bringing the total to 125 (45 domestic and 80 international routes). Remarkably, Vietjet became the first airline to connect Vietnam with Australia’s five largest cities, creating new opportunities and strengthening international ties.
The airline’s financial performance echoed its operational success, reporting consolidated revenues of VND13,548 trillion (approx. US$551.38 million) and VND14,235 trillion (approx. US$579.34 million) in Q3/2023, a 32% and 23% increase YoY respectively. After-tax profits for separate and consolidated entities stood at VND579 billion (approx. US$23.58 million) and VND55 billion (approx. US$2.23 million), respectively, witnessing a remarkable 175% and 30% YoY increase.
International passenger transport at Vietjet continued its upward trajectory, increasing by 201% YoY, accounting for over 57% of the total passenger revenue and 35% of the total number of flights and passengers. This growth is a clear indication of Vietjet’s expanding global footprint and its increasing appeal to international travellers.
Ancillary and cargo revenue, known for their relatively high-profit margins, have not been overlooked. Generating a total revenue of VND5,029 billion (approx. US$204.87 million), these segments accounted for 40% of the airline’s total air transport-related revenue, growing by 26% YoY and a staggering 77% over Q3/2019.
As of September 30, 2023, Vietjet’s financial stability is evident, with total assets exceeding VND76,500 billion (approx. US$3.11 billion). The debt-to-equity ratio stood at a comfortable 1.5 times, while the liquidity ratio was at a healthy 1.4 times, both within safe levels of the aviation industry, ensuring the airline’s financial robustness.
Vietjet’s influence extends beyond the skies, playing a pivotal role in driving the economy, commerce, and tourism sectors. Its reputation as a reliable strategic partner for prestigious organisations worldwide is well-earned and acknowledged.
Regarding liquidity, as of September 30, 2023, Vietjet’s cash and cash equivalents balance stood at VND2,077 billion (approx. US$84.36 million). Together with the working capital, this guarantees the company’s immediate solvency and financial health.
During the first nine months of 2023, Vietjet’s contribution to the state coffers was significant, paying nearly VND3,750 billion (approx. US$152.6 million) in direct and indirect taxes and fees, showcasing its commitment to corporate responsibility and economic development.
Highlighting its strategic vision and robust growth, Vietjet inked a landmark agreement with Boeing for the delivery of 200 737 MAX aircraft, worth US$25 billion, over the next five years during the official visit of US President Joe Biden to Vietnam. An agreement with Carlyle Aviation for aircraft financing worth US$550 million was also reached, solidifying Vietjet’s financial and operational strength.
The Q3/2023 period saw Vietjet attract attention from investors, both local and international, reaching preliminary agreements with three Vietnam-based institutional investors, committing to invest US$100 million in the company. This strategic move is poised to enhance Vietjet’s financial capacity, supporting growth, investment, network expansion, and fleet expansion. The investment transactions are expected to be completed in the fourth quarter of 2023, marking a significant milestone in Vietjet’s journey.
In recognition of its stable operations and development, Vietjet’s credit rating has been upgraded to VnBBB- from VnBB+ with a stable outlook by Saigon Ratings, Vietnam’s first independent credit rating agency, a clear acknowledgment of the airline’s financial stability and promising future.
Investing in human capital and infrastructure, Vietjet has taken proactive steps to build aviation human resources of international standards. This includes upgrading infrastructure and developing a pool of trainers at the Vietjet Aviation Academy (VJAA). In September 2023, VJAA became an official training partner of the International Air Transport Association (IATA), a testament to Vietjet’s commitment to excellence and industry leadership.
The accolades and awards bestowed upon Vietjet speak volumes of its commitment to customer experience and brand value. Recognition such as “Asia’s Leading Airline for Customer Experience” by the World Travel Awards, “Top 100 Most Valuable Brands in Vietnam,” and “Top 10 Strong Brands for Sustainable Development 2023” by the Vietnam Economic Times reflects the airline’s unwavering commitment to service excellence and innovation.
Vietjet’s corporate social responsibility initiatives have also garnered attention, with the airline actively participating in relief efforts during natural disasters, contributing to education, and leading environmental sustainability projects. The company is committed to achieving net-zero carbon emissions by 2050, aligning with the International Air Transport Association’s goals.
Looking ahead, Vietjet’s strategic vision, financial resilience, and operational efficiency position it firmly to navigate the future of aviation, cementing its role as a critical player in the industry and a leader in sustainable aviation practices.
With a strategic approach, steadfast dedication, and a focus on innovation, Vietjet continues to soar high, achieving milestones and driving the future of aviation in Vietnam and beyond.
Written by: Christine Nguyen
