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Vietjet Sees Potential for 20% Increase in Revenue in 2021
On Tuesday, Vietjet held ITS Annual General Meeting of Shareholders 2021 to review its business results in 2020, a year of overcoming the pandemic, and to seek approval for the airline’s 2020 audit report and 2021 development plan.
Following the positive forecast for 2021, Vietjet oriented its 2021 business plan delivering a “Back to the Sky” message, focusing on domestic growth while being on standby for the resumption of the international market in July 2021.
However, taking into account the development of the COVID-19 pandemic with the recent surges in numerous variants, the airline’s shareholders have passed a different resolution to resettle a more cautious business plan for 2021.
New Target Figures
Particularly, Vietjet is looking towards 2021 targets for air transport revenue at VND15,500 billion (US$670 million) and a consolidated revenue of VND21,900 billion (US$945million), achieving year-on-year growth of 20%.
These targets will be mainly driven by an exponential increase in cargo revenue, new services in air transport, personnel training, and aircraft maintenance, and they include several investments in projects and finance, allowing for the airline to be ready for its recovery phase.
The Vietnamese low-cost carrier will keep revolving around its customer-focused strategy while striving for innovation and creativity as it is expected to digitalize every service available and operation protocols, growing business to improve its productivity and service quality.
Additionally, Vietjet has also been planning for its passenger load factor to reach 80% while its on-time performance stands at over 90%, and it hopes to serve up to 15 million passengers across its flight network.
Adding onto more investments into the Vietjet Aviation Academy (VJAA) for an infrastructure and equipment build-up, the airline is also investing in a technology park to welcome the arrival of aviation experts and activities as part of the efforts to make Vietjet one of the top airlines in the world.
Speaking at the Annual Shareholder Meeting, Vietjet’s President & CEO Nguyen Thi Phuong Thao said, “As a better future lies ahead, we’ll work hard and relentlessly to make it come closer.”
At the event, the airline’s shareholders also voted through the proposal for the appropriation of profit in pursuant to Resolution 01-2020 of the General Shareholders Meeting 2020 and the appropriation of profit plan 2021.
Accordingly, the Board of Directors (BOD) has declared a 25% stock dividend to focus the financial resources on the air transport business.
To guarantee sufficient resources for a safe and efficient comeback of Vietjet, the shareholders agreed to let the BOD decide on a plan to raise charter capital through private placement of shares at a maximum of 15% of the charter capital.
Not only that, but the BOD will also consider a US$300 million international bond offering in 2021-2022 to allow Vietjet to boost its financial capacity when the air travel markets rebound.
The shareholders have also passed an Employee Stock Ownership Plan to issue up to 10 million shares, which is expected to drive a boost for innovation and creativity, encouraging the working spirit and employee retention for the future of Vietjet’s development.
In his remark at the event, General Director of Civil AviationAuthority of Vietnam Dinh Viet Thang spoke highly of Vietjet’s enormous efforts to remove obstacles and sustain its business during the pandemic, especially in abiding by strict COVID-19 prevention regulations.
He also said that the company has played an active role in many government campaigns, including repatriating Vietnamese stranded overseas during the pandemic and airlifting disease prevention equipment.
At the meeting, Deputy Minister of Transport Le Anh Tuan also recognized that Vietjet has contributed a fair share to the development of air cargo sector in Vietnam.
“The Ministry of Transport highly appreciates Vietjet’s dynamic management approach. The pre-pandemic Vietjet was the most efficient airline in terms of productivity with its profit in 2019 the largest in the aviation industry. We believe that Vietjet will be able to stay on this track once the pandemic is over,” Le said.
Regarding the audit report 2020, the revenue of the parent company stood at VND15.203 billion (US$656million) while air transport made a loss of VND1,453 billion (US$62.7 million), relatively lower than originally expected.
The consolidated revenue was reported at VND18.220 billion (US$787million) and the consolidated profit reached VND68 billion (US$2.9 million), making Vietjet as one of the few airlines in the world managing to keep its core business afloat while retaining jobs for its employees and churning a profit in 2020.
Vietjet also opened eight new domestic routes in 2020, flying more than 15 million passengers with a passenger load factor of 80 percent while on-time performance rate stayed at a global high of 90 percent.
Proactively implementing new approaches to develop the cargo sector, Vietjet was the first airline in Vietnam allowed to deploy cargo operation in passenger cabin and has since delivered more than 60,000 tons of cargo on nearly 1,200 flights in 2020.
It has airlifted cargo as far as the Americas and Europe, which has contributed extra revenue to the parent company.
2020 also marked the first running year of the Vietjet Ground Services Center at Noi Bai International Airport in Hanoi. The center has helped the airline greatly improve its service quality while cutting back on outsourcing costs.
Extending training courses for the employees, the VJAA has offered more than 47,300 hours of training throughout 2020.
Vietjet has partnered with Toulouse-based aircraft manufacturer Airbus to install the second flight simulator (SIM) to remarkably improve its pilot training capability, making VJAA the most advanced aviation training and practicing centre in the region.
With its focus intensified on effective operations and performance, as well as financial management and even safety – through the IATA Digital Pass trial – Vietjet has been making steady progress in its recovery phase and is looking to continue to come out of the pandemic, even stronger than before.
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