Vietnam Airlines announces business results of first half of 2019

July 17, 2019 | 08:36
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Vietnam Airlines JSC (code HVN) on July 16 announced its business performance for the first half of 2019, reporting VND51.66 trillion ($2.25 billion) in consolidated revenue, up 5.5 per cent year-over-year, and VND1.65 trillion ($71.74 million) in consolidated pre-tax profit, 30 per cent higher than planned.
vietnam airlines announces business results of first half of 2019
Vietnam Airlines Group announces business results of the first half of 2019

Vietnam Airlines – the parent company – earned VND38.3 trillion ($1.67 billion) in revenue, up 5.8 per cent year-over-year, and VND1.787 trillion ($77.7 million) in pre-tax profit, up 21.8 per cent year-over-year, 13.6 per cent higher than planned.

The continued improvement in cash flows enabled higher solvency, more short-term investments, and increased corporate income. As of June 2019, the airline continued its positive financial indicator with debt to equity ratio of 2.32, lower than that of the beginning of the year (2.58) and far below the upper limit set by the state.

Over the course of six months, Vietnam Airlines safely flew over 13.9 million passengers, a 2 per cent increase from 2018, and over 180,000 tonnes of cargo, up 1.6 per cent year-over-year, on 73,650 flights. Its on-time performance (OTP), averaging at 90 per cent, remained among the highest globally. Demand-responsive load factor led to significant fuel savings and higher seat utilisation of 80.3 per cent. Thanks to its operational efficiency, Vietnam Airlines Group (including Vietnam Airlines, Jetstar Pacific, and VASCO) continued to spearhead the local aviation market, carrying approximately 51 per cent of the aggregate passenger volume.

These figures reflect a robust performance from Vietnam Airlines amidst the slowdown in purchasing power growth, a saturation of the domestic market, surging fuel prices during the first five months, as well as fluctuation in the exchange rates between key payment currencies and USD.

The first half of the year witnessed an ongoing advancement of Vietnam Airlines’ products and services, namely the introduction of the premium economy class to the Hanoi-Ho Chi Minh City route, offering passengers economical business class seats. The service quality on its international flights has also been further enhanced since Vietnam Airlines put two wide-body aircraft types, Airbus A350 and Boeing 787, into service on routes to Southeast Asian destinations and switched its operation in Moscow, Russia over to Sheremetyevo Airport from Domodedovo Airport.

Vietnam Airlines also introduced new and upgraded services such as in-town check-in (Hanoi and Danang), telephone check-in (Ho Chi Minh City), family check-in, meet and greet, as well as serve slocal produce on board. Notably, the proportion of online check-ins has grown year-over-year, reaching nearly 50 per cent at all three major domestic airports, Noi Bai, Danang, and Tan Son Nhat.

Thanks to these dedicated efforts, Vietnam Airlines was certified as a four-star airline for the fourth consecutive year, having successfully met the rigorous rating criteria of Skytrax. Remarkably, Vietnam Airlines’ areas rated 4.5-5 star increased by 16 per cent against 2016 when it first received the four-star certificate. With Vietnam Airlines having met 85 per cent of the four- and five-star criteria, this is a stepping stone for it to become Vietnam’s first five-star airline after 2020.

As far as flight network and fleet expansion are concerned, Vietnam Airlines Group launched seven new domestic routes connecting Ho Chi Minh City to Chu Lai, Hanoi to Dong Hoi, and Danang to Thanh Hoa, Vinh, Da Lat, Phu Quoc, and Can Tho. In the first half of 2019, Vietnam Airlines also welcomed eight narrow-body Airbus A321neos and two wide-body Airbus A350s to its fleet, completing its total order of 14 Airbus A350s.

To realise the policy of workforce restructuring and productivity improvement, as of June 30, 2019, Vietnam Airlines had 6,445 employees, 4 per cent lower than the same period last year and 7.4 per cent lower than planned. Higher productivity and wage reform made it possible for Vietnam Airlines Group to pay pilots better from June 1, 2019 and increase the welfare of all its employees.

Having boosted the charter capital to more than VND14.2 trillion ($617.39 million), Vietnam Airlines had its own shares (HVN) officially listed on the Ho Chi Minh City Stock Exchange (HSX) on May 7, 2019. The group also convened a fruitful Annual General Meeting of Shareholders and paid cash dividends to its shareholders.

Additionally, Vietnam Airlines finalised key business projects such as an organisational restructuring plan for the 2021-2025 period, the fleet development plan for 2021-2025 with a vision towards 2030, and investment policy in 50 narrow-body aircraft for the 2021-2025 period, all of which have been submitted to the State Capital Management Committee for feedback.

In the second half of 2019, Vietnam Airlines plans to push for organisational restructuring. The carrier expects to complete its 20 narrow-body Airbus A321neo fleet, take delivery, and operate the first three wide-body Boeing 787-10s out of an order book of eight aircraft and finalise the investment plan of 50 narrow-body aircraft for the 2021-2025 period.

Vietnam Airlines continues to improve customer experience by including onboard Wi-Fi services, introducing a brand-new Business class menu created by Cuisine Ambassador Luke Nguyen, and rigorously replacing non-environment-friendly supplies on board. Safety performance, OTP, flight scheduling coherence, and resource optimisation remain the top priorities on Vietnam Airlines’ agenda.

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