Summary
- Vietjet reported a before-tax profit of $24.4 million in 2023, with significant revenue growth in air transport and ancillary services.
- The airline’s success is attributed to fleet renewal, international expansion, and financial management strategies.
- Vietjet’s Aviation Academy in Ho Chi Minh City plays a crucial role in training aviation professionals and has a partnership with IATA.
In Australia, Vietnam’s largest private airline Vietjet is probably best known for its $0 fares and how quickly it has opened up the whole country to cheap flights to Vietnam and across Asia on its 125 domestic and international routes. The airline brought competition back to Australians when international and domestic airfares had climbed so high as to become unaffordable for many, particularly from the major incumbent carriers serving the nation.
2023 was a good year for Vietjet
Despite that burst of aggressive marketing, which continues today, Vietjet Aviation Joint Stock Company (Vietjet) announced this week that in 2023 it had made a before-tax consolidated profit of US$24.4 million, of which $18.9 million was earned from from air transport. Those profits came from consolidated revenue of $2.35 billion, including $2.16 billion of air transport revenue, which was a year-on-year increase of 45% and 62%, respectively.
Photo: Vietjet
Ancillary and cargo revenue amounted to nearly $840.7 million, which was 39% of total transportation revenue and a year-on-year increase of more than 60%. Those results flowed through the balance sheet, with Vietjet’s total assets reaching approximately $3.5 billion and a debt-to-equity ratio of 2, well below the typical global range of between 3 and 5, while its liquidity ratio stood at 1:3.
Vietjet has the highest credit rating of VnBBB-, placing it among the best-performing Vietnamese organizations and on December 31, 2023, it had cash and cash equivalents of $203.6 million, which was more than 2.7 times higher than at the same time in the previous year. During 2023 the low-cost carrier paid approximately $209.63 million of direct and indirect taxes and fees.
Photo: Vietjet
These results, which were released on Wednesday, show just how well Vietjet is managing its operations and the airline attributes much of its success to the fleet renewal and growth strategies, including adding Airbus A321neos and A330s which are fueling its international expansion. It is also adding new domestic Airbus A320 destinations where there are opportunities, but in 2023 it was the stunning expansion in Australia and India that kept its widebody A330s busy.
International expansion is key for Vietjet
In 2023, Vietjet operated 133,000 flights that carried 25.3 million passengers, a 183% year-on-year increase, with 7.6 million flying on international routes. The airline launched 33 new domestic and international routes and at the end of the year was operating flights on 125 routes, including 80 international and 45 domestic routes.
Photo: Melbourne Airport
Vietjet started 2023 with no presence in Australia and in less than 12 months it has successfully launched flights to five major cities from Ho Chi Minh City, including Melbourne, Sydney, Brisbane, Perth and Adelaide. The airline has said it is actively looking at other Australian destinations and has also announced Airbus A330 nonstop flights from Melbourne and Sydney to Hanoi starting in June.
In November last year, Vietjet launched a new route from Ho Chi Minh City to Tiruchirappalli, which it is now operating with an A320-200 single-aisle jet. It is the airline’s fifth nonstop destination in India, joining New Delhi, Mumbai, Ahmedabad and Kochi and the initiative by Vietjet to open routes to India has provided convenient and affordable travel options for residents, tourists and business people traveling between the two nations.
Photo: Airbus
Vietjet operates the most flights connecting Vietnam to India and Australia and in December launched an interesting service from its coastal city of Nha Trang to the capital city of Mongolia, Ulaanbaatar, the coldest capital city in the world by average yearly temperature. Vietjet also commenced flights from Hanoi to Hiroshima in Japan and to Chengdu in China, enabling new bilateral tourism, business and trade opportunities.
The Vietjet Aviation Academy
Located in Ho Chi Minh City, the Vietjet Aviation Academy (VJAA), which this writer has visited, is an exceptional facility that is training thousands of new entrants to aviation in most facets of the industry. In 2023 the academy trained more than 97,000 trainees through 6,300 courses, including the specialized and demanding training needs for pilots, cabin crew, maintenance technicians and other operational and administrative airline roles.
Photo: Vietjet
The VJAA has three flight simulators for pilot training and certification and is a training partner of the International Air Transport Association (IATA). As an IATA Regional Training Partner (RTP), the academy will offer IATA Training courses that are internationally recognized and regularly updated to stay ahead of the latest regulations, new standards, and the rapidly changing needs of the aviation industry.
Photo: Vietjet
Since it opened more than a decade ago, the academy has trained more than 395,000 trainee pilots, cabin crews, engineers, and staff, and as well as looking after Vietjet’s training it also meets the needs of the region’s aviation industry.
Vietjet said that the partnership with IATA combined with its strategic location will see the academy become a gathering place for international students to practice, study, create, and realize their dreams of flying.
Have you flown with Vietjet? Let us know in the comments.
