FLC Group’s shares of Bamboo Airways down by half

Vietnam's FLC Group showed a sudden increase in financial profit and an ownership rate of 51.11 percent in its financial statement of the fourth quarter of 2019 released on Monday.

According to the report, FLC recorded more than VND5 trillion ($216 million) of net revenue in Q4, an increase of nearly 23 percent year-on-year.

However, FLC’s business operations were not profitable as it suffered gross losses of more than VND368 billion ($15.88 million).

Its profit after tax of nearly VND600 billion ($25.89 million) in Q4 was mainly generated by financial activities, the report shows.

FLC’s financial revenue in Q4 reached nearly VND1.5 trillion ($65 million), more than three times the same period in 2018. Financial expenses cost VND124 billion ($5.35 million), helping FLC reap VND1.4 trillion ($60 million) of profit from this activity.

The profit not only offset the loss from its business activities and operating expenses, but also helped FLC to double its profit after tax of the same period.

In 2019 as a whole, financial activities also allowed FLC to offset the losses from business operations and operating costs.

The group's total revenue reached more than VND16.4 trillion ($707.6 million) last year. Its gross loss was more than VND340 billion ($14.67 million). Profit from financial activities was more than VND2.5 trillion ($107.9 million).

FLC reported a profit after tax of over VND780 billion last year ($33.6 million) in 2019, 16 percent higher than 2018.

Leaders of Bamboo Airways said after nearly a year of taking off, Bamboo Airways is losing hundreds of billions of dong (VND100 billion = $4.32 million), but this is normal for newcomers in the aviation industry.

In mid 2019, FLC Chairman Trinh Van Quyet also said that the group had to compensate for losses because of Bamboo Airways when the airline was only allowed to operate 10 aircrafts but has to maintain personnel to prepare for its plan of adding 20 more aircrafts to the fleet.

Dang Tat Thang, Vice Chairman of the airline, expects that when Bamboo Airways operates 30 aircraft in the first quarter of 2020, the airline can start to be profitable.

Launched in January 2019, the airline is now operating 34 domestic and international routes. It has conducted nearly 20,000 flights to date, recording almost 3 million passengers.

The entry of Bamboo Airways earlier this year has eaten into the market share of national flag carrier Vietnam Airlines and budget carrier Vietjet.

Bamboo Airways hopes to acquire 30 percent of the domestic aviation market this year as it flies 85 routes, 25 of them international. It also plans to operate 100 aircraft by 2025, carrying 50 million passengers annually.