International flights boost Vietjet Air’s Q2 profit

By Dang Khoa   July 30, 2018 | 05:05 pm PT
International flights boost Vietjet Air’s Q2 profit
A VietJet aircraft is seen at Noi Bai International airport in Hanoi. Photo by Reuters/Kham
Budget carrier Vietjet Air has announced pretax Q2 profits of $41 million, a year-on-year surge of 44 percent.

Nguyen Thi Phuong Thao, Vietjet Air CEO, said the company earned second quarter revenues of more than $371 million because more customers chose the airline for their international flights, and sales of insurance and in-flight food reached record highs.

Two-thirds of 5.8 million passengers the airline carried in the second quarter were on international routes, Thao said.

She said the airline was planning to buy more planes in order to compete with other carriers like Lion Air (Indonesia) and AirAsia (Malaysia).

Vietjet has ordered 370 single-aisle airplanes from Boeing and Airbus SE. This includes 100 Boeing 737 MAX aircraft planes worth almost $13 billion. The carrier currently has 60 Airbus SE narrow-body planes.

Thao told Bloomberg that since domestic competition was getting fiercer, the company was looking to expand its international flights segment and boost revenues from non-ticket sources like food, baggage fees and insurance.

Vietjet is focusing on international flights that take less than six hours. It has been reported that the carrier will raise capital by selling and leasing back some of its aircraft, issuing overseas bonds and taking bank loans.

Vietjet is among Vietnam’s biggest and fastest-growing airlines. Its 2017 pre-tax profit is estimated to have surged 75.9 percent annually, according to Reuters.

The latest competitor in the aviation market, Bamboo Airways, is expected to begin services this October.

Vietnam's aviation industry has experienced rapid growth in recent years. The country served more than 53 million air passengers in the first half of this year, up 14 percent from a year ago.

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