Vietjet Aviation Joint Stock Company - Key Highlights -2018 Business results - VietJetAir.com
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Vietjet Aviation Joint Stock Company
Key Highlights –2018 Business results
Disclaimer
INFORMATION CONTAINED IN OUR PRESENTATION IS INTENDED SOLELY FOR YOUR REFERENCE. SUCH
INFORMATION IS SUBJECT TO CHANGE WITHOUT NOTICE, ITS ACCURACY IS NOT GUARANTEED AND IT
MAY NOT CONTAIN ALL MATERIAL INFORMATION CONCERNING THE COMPANY. NEITHER WE NOR OUR
ADVISOR MAKES ANY REPRESENTATION REGARDING, AND ASSUMES NO RESPONSIBILITY OR LIABILITY
FOR, THE ABILITY, THE ACCURACY OR COMPLETENESS OF, ANY ERRORS OR OMISSION IN, ANY
INFORMATION CONTAINED HEREIN. IN ADDITION, THE INFORMATION MAY CONTAIN PROJECTIONS AND
FORWARD-LOOKING STATEMENT THAT REFLECTS THE COMPANY'S CURRENT VIEWS WITH RESPECT TO
FUTURE EVENTS AND FINANCIAL PERFORMANCE. THESE VIEW ARE BASED ON CURRENT ASSUMPTIONS
WHICH ARE SUBJECT TO VARIOUS RISK FACTORS AND WHICH MAY CHANGE OVER TIME. NO
ASSURANCE CAN BE GIVEN THAT FUTURE EVENTS WILL OCCURS, THAT PROJECTIONS WILL BE
ACHIEVED, OR THAT COMPANY ASSUMPTIONS ARE CORRECT. ACTUAL RESULT MAY DIFFER MATERIALLY
FROM THOSE PROJECTED. THIS PRESENTATION IS STRICTLY NOT TO BE DISTRIBUTED WITHOUT THE
EXPLICIT CONSENT OF THE COMPANY'S MANAGEMENT UNDER ANY CIRCUMSTANCES.
1
Largest domestic airline in Vietnam, the fastest growing aviation market in Asia Pacific
Highest growth in air passenger traffic and inbound tourism
Air passenger traffic growth Inbound tourism growth(1)
2012-2017 Historical Passenger Traffic CAGR (%) 2012-2017 Inbound Tourism CAGR (%)
Vietnam 28.9% 8.7% 8.6%
China 11.5%
Thailand 11.1% 6.9%
6.5%
South Korea 10.4%
India 10.1%
Malaysia 8.1%
New Zealand 5.9%
3.1%
Philippines 5.0%
2.0%
Indonesia 4.2%
Singapore 3.9%
Australia 2.5%
Asia Pacific Avg.: 8.7% Vietnam Thailand Philippines Indonesia Singapore Malaysia
Japan 2.2%
Source: Euromonitor, EIU; Note: (1) Refers to number of non-resident visitors who travel to the country for a period not exceeding 12 months for non-commercial related activities 2
2
Largest domestic airline in Vietnam, the fastest growing aviation market in Asia Pacific
Vietnam is supported by strong fundamentals
Large population estimated One of the fastest growing SEA economies A powerful consumer economy(1)
to reach 96.5 million in 2018
(2016-2018e GDP CAGR) Highest forecasted growth in personal disposable income
+ 8% 8.0%
7% 6.7% 6.7%
Young population with a 7.0%
2012-2018e Disposable Income
sizable 25.9% between 20 5.6%
6% 6.0%
per Capita CAGR (%)
and 34 years of age 5.2%
5% 5.0%
+ 4%
3.9%
3.3% 4.0%
High growth in personal 3%
3.0%
disposable income
2%
2.0%
1%
+ 1.0%
-
VN PH MY ID TH SG -
Lengthy topography lacking 40% 45% 50% 55% 60% 65%
effective road / rail connectivity % of Population in Workforce (%)
+
Demonstrated growth in private consumption Large upside potential with low LCC penetration
Low air travel penetration (2012-2018e private consumption per Capita)
LCC
Seats /
8% 383 4,627 1,901 1,103 2,729 1,746 1,018 379 335
‘000
+ 7%
6.9% people
6% 45
Growing tourism industry 38.8
40
5%
35
28.8
4% 30
+ 3.0% 2.9%
# aircraft
/ million 25
25.9
3% people
2.0% 20 14.9
Emergence of LCC as an 2% 1.6% 15
affordable option 9.5
1% 0.6% 10
4.7
5 1.7 2.6 2.1
- -
VN MY PH TH ID SG VN SG AU US UK MY TH ID PH
Large LCC market with significant
growth opportunities
Source: EIU, CAPA, Euromonitor; Note: (1) Population size is proportional to size of country flag 3
3
Largest domestic airline in Vietnam, the fastest growing aviation market in Asia Pacific
Allowing air travel to become a more accessible and efficient mode of transportation
Air travel is the most efficient means of transportation in Vietnam
Travel is substantially faster and more efficient by air compared to bus and rail as a result of Hanoi
Vietnam’s terrain. For example, a flight from HCMC to Hanoi takes c.2 hours compared to c.34 –
35 hours for bus and rail Hai Phong
As income levels rise and air fares decrease, people are expected to continue to switch from bus Thanh Hoa
and rail to air travel Vinh
Low cost air travel has also made flying a viable option for the masses
Dong Hoi
With more than 40% of the population in the 25-59 years working class age band and increasing
Hue
inter-city travel demand as the national economy develops, air travel is expected to gain in Da Nang
popularity and prevalence over other modes of transport
Chu Lai
Air travel is the most cost effective mode of transportation(1) Pleiku Quy Nhon
HCMC – Hanoi HCMC – Danang Buon Ma Thuot
Travel Tuy Hoa
modes
Time (hrs) Fare (VND) Fare (USD) Time (hrs) Fare (VND) Fare (USD) Da Lat Nha Trang
(2)
Air 2:05 961,000 44(3) 1:20 615,000 28(4)
Phu Quoc
HCMC
Bus 35:00 861,385 39 15:30 405,458 19
Rail 34:00 1,066,278 49 17:00 616,833 28 Can Tho
stimulates airline travel and captures market share from other modes of transport such as bus and rail
due to the advantages of air travel vis-à-vis land transport
Source: SAP Independent Industry Report, IMF; Note: (1) Bus and rail fares shown are based on average fares for travelling on 1 Mar 2016 and 1 Apr 2016, as of 1 Feb 2016; US$1:VND 21,890, (2) Airfare refers to average VietJet ticket base 4
4
fares for FY2015, (3) Base airfare excludes other ancillary fee of USD8.3; total gross fare of USD52.3, (4) Base airfare excludes other ancillary fee of USD7.4; total gross fare of USD35.4
Largest domestic airline in Vietnam, the fastest growing aviation market in Asia Pacific
Domestic market leader with strong government support
# of AOCs (Air Operator’s Certificate excludes General Aviation) “Viet Nam regards the private sector as a development force”
–Mr. Nguyen Xuan Phuc, Prime Minister
Key government incentives to support VietJet
37 37
Air Transport
US$10.5bn commitment to develop airport infrastructure across
27 the country, increasing the number of operational airports from
Masterplan
22 to 26 by 2020
5
Changes in regulations to support the airline industry
Vietnam Indonesia Thailand Philippines
Reduction in Fuel
Petrolimex Aviation JSC (Petrolimex Aviation) was permitted to
supply air fuel in August 2009, ending monopoly by Skypec, a
Supply Monopoly
Vietnam Airlines owned company
Only CAAV / MOT approval (as opposed to PM’s previously)
would be required for the first-time transfer of shares to foreign
Decree 92 on shareholders, opening the door for investor participation in
transfer of airlines
Highly concentrated domestic markets, effectively a duopoly shares in airlines However, investment opportunities in Vietnamese airlines are
to foreigner limited as the remaining 3 airlines are state-owned
Vietnam domestic market share % air passenger volume(2)
Foreign ownership limit at 30% and largest shareholder must be
Vietnamese
2%
13%
37%
Changes in regulations to support the airline industry
Historically Two other domestic airlines in the past went bankrupt (Mekong
struggled Air and Indochina Airlines) and their licenses have been
airlines withdrawn
48%
Although the Government is open for new entrants, no new
airlines entered the market since 2011
Potential new
entrants No foreign airline is permitted to operate domestic routes,
Minimal foreign competition as no foreign airlines permitted to operate which allows local airlines like VJC to enjoy the growth of local
domestic routes market
Source: CAPA, SAP independent industry report; CAAV, Ministry of Transportation Republic of Indonesia, Civil Aviation Authority of the Philippines, Department of Civil Aviation (DCA) of Thailand, Axis Research Ltd. report dated July 2015; 5
5
Note: (1) Market share by capacity as of week commencing 31 Dec 2012, 30 Dec 2013, 29 Dec 2014, 28 Dec 2015, 26 Dec 2016, 25 Dec 2017 and 27 Aug 2018 respectively, (2) CAAV data: Passenger Market share for H1 2018
Young fleet with large growing order book
Young, modern and fuel efficient fleet, driving lower maintenance & fuel cost in the long
term
Youngest fleet in APAC
(average age of aircraft fleet)
Asia(1) Europe / Middle East(1)
Average: 5.78 years Average: 5.46 years
2.82
FY2018
Significant fleet growth with sizeable orderbook
(# aircraft)
250 242
211
200
176 116
97
150 139
74
96 49
100
74 18
8
50 126
114
50 102
90
78
66
50
-
FY17 FY18 FY19 FY20 FY21 FY22 FY23
VietJet VietJet Affiliates 6
Source: Company Information; Note: (1) Based on latest reported financial year
6
Key Highlights
Carried 23.1m passengers 2018, an increase of 33.5% vs. 2017 (17.3m).
Capacity 2018 achives 26.2 m seat flown, increase 36% vs. 2017 (19.2m).
Vietjet operate 105 routes in 2018 including 39 Domestic routes and 66 International routes, compared
with 38 Domestic routes and 57 International routes in Q4 2017.
Airline Revenues 2018 achieve 33,815 bil VND, increased 49% vs. 2017 (22,644 bil VND).
Operating Profit of Air Transportation 2018 reached 4,748 bil VND , 43% higher than that 2017(3,311 bil
VND).
Load Factor is maintained at high figure with nearly 88.06% in 2018.
Achieve the high technical reliability of 99.61% among top Airlines in Asia Pacific region.
Avg. Price of Fuel Jet A1 2018 is 84.9 USD/barrel, 29% increased compared with that in Dec-2017 (65.7).
Ranked among the world's 50 best airlines (in the 22nd) by Air Finance Journal.
Vietjet is in VN30, Top 10 of capitalization in stock market.
Leading on Domestic Airline market share.
Fx. rate as at 31/12/2018 is 23.070 VND/USD, compared with 22.766 VND/USD in 31/12/2017.
7
Operating statics
Number of Aircraft EOP
64
52
Modern and young fleet with
average age of 2.82 years
comprising 23 Airbus A320s and 34
2017 2018
A321s and 7 A321NEO as of Dec
2018. Total passengers flown of VJC (m pax.)
23.1
Operated an extensive network of
17.3
39 domestic routes and 66
international routes, services as of
Dec 2018.
YTD2017 YTD2018
Pax Carried: 23.1m passengers Total sector flown (‘000)
2018, increased 33.5% vs 2017.
118.6
97.3
Vietjet operated a total of 118,555
commercial flights 2018 (regular),
increased 22% vs 2017 (97,300
YTD2017 YTD2018
flights).
8
Best Class In Operating Performance – YTD (*)
Unit: Billion VND
Airline Revenues achieve Airline Revenues Airline Profit before Tax
40,000 4,000
33,815 bil VND, increase 33,815
3,019
30,000 3,000
49% vs. 2017 . As result, 22,644 2,045
20,000 2,000
Airline PBT achieve 3,019 bil 10,000 1,000
VND, increased 48% vs. 0 -
YTD 2017 YTD 2018 YTD 2017 YTD 2018
2017.
Consolidated Revenues
achieve 52,388 bil VND, Consolidated Revenues Consolidated Profit before Tax
60,000 52,388 10,000
increase 24% vs. 2017. As 42,303 8,000
40,000 5,302 5,829
result, Consolidated PBT 6,000
20,000 4,000
achieve 5.829 bil VND, 2,000
0 -
increase 10% vs. 2017.
YTD 2017 YTD 2018 YTD 2017 YTD 2018
(*) These information are based on unaudited financial statement 2018 9Ancillary revenue upside (*)
Ancillary revenue per pax USD/pax
2018 Ancillary revenue per pax 20.0
17.91
is achieved 17.91, increased
14.73
22% vs 2017. 15.0
% Total Ancillary revenue of 10.0
Total Operation Revenue is 26%
5.0
in 2018. YTD 2017 YTD 2018
Ancillary revenue of Total Operation
Revenue
27%
26.0%
26%
25.0%
25%
24%
23%
22%
21%
20%
19%
YTD 2017 YTD 2018
(*) These information are based on unaudited financial statement 2018 10Excellent Financial Performance : RASK, CASK (*)
4.5 4.47
Revenue per ASK (RASK) 2018 achieves 4.31
4.3
4.47 US cent, increases 3.7% vs. 2017. 4.0
3.8
Cost per ASK (CASK) 2018 achieves 4.00 3.5
YTD 2017 YTD 2018
US cent, increases 5.3% vs. 2017 due to
RASK
increasing significantly in jet fuel price.
4.5 4.00
3.80
3.8
CASK ex-fuel 2018 is 2.20 US cent was
3.1
slightly decreased vs 2017. 2.24 2.20
2.4
1.7
As result, RASK – CASK achieves 0.47 US
1.0
cents. This performance was excellent in YTD 2017 YTD 2018
CASK and CASK ex-fuel
compared with others in Airline Industry.
0.6 0.51
0.47
0.4
0.2
0.0
YTD 2017 YTD 2018
RASK - CASK
(*) These information are based on unaudited financial statement 2018 11Operating Performance – cont. (*) Đơn vị: tỷ đồng
Total assets 2018 achieve 39,223 bil. VND, Total Asset
increase 24% vs 2017. 50,000
39,222
40,000
Total Equity 2018 achieve 13,925 bil. VND,
31,658
increase 31.4% vs. 2017 due to strong 30,000
Retained Earnings. 20,000
10,000
Cash and Cash equivalent 2018 achieve
7,165 bil VND increase 5% vs. 2017 due to 0
YTD2017 YTD2018
strong cash flow from sales.
Equity
Net Dept/Equity ratio decreased from 0.33
20,000
(2017) to 0.26 (2018).
16,000
13,925
Cash and Cash equivalent
10,000
12,000 10,594
8,000
6,862 7,165
4,000
5,000
0
YTD2017 YTD2018
0
12
YTD2017 YTD2018
(*) These information are based on unaudited financial statement 2018Cost, cost & cost!
A strong focus on cost
13Best In Class Cost Structure With Room For Improvement
8.55
7.13 7.20
6.76
6.18
5.73 5.83 5.72 5.89
5.56 5.59 5.54
5.34 5.40
5.13 5.16 5.02 5.15
4.74
4.47 4.56 4.424.29
4.00 3.98 4.02 4.10
3.78 3.73
3.54 3.42 3.46
3.07
2.74 2.82
2.20 2.36
1.94
Norwegian Air
Airasia group
Cebu Pacific
Jetstar
Ryanair
Gol Linhas
Nok
Allegiant
Vietjet Air
Indigo
Southwest
Spirit
SpiceJet
RASK CASK - ex fuel CASK
Lowest CASK-Ex fuel. There is still headroom for cost structure improvement to further decrease both CASK & CASK ex-fuel
•Source: Bloomberg, Company Financial Statement
14
•Vietjet’s results are based on Q42018 Financial Statement. Other peers’ results are based on full year 2017 number.Comprehensive fuel saving program
Applying advanced technology and
environment friendly solution in daily
operation is one of the top priorities of
Vietjet. By analyzing both operational
and maintenance aspects, Safran’s
SFCO2® service develops procedures
and recommendations to address
airlines’ need for greater fuel efficiency
which can reduce Vietjet fuel
consumption up to 5%
In 2018, the SFCO2 program saved 3.6
million kg of fuel.
15Flight network extension
The number of Routes: 105 routes
(includes: 39 domestic routes and 66 international routes
16FLEET EXPANSION
Young, modern and Fuel Efficient Fleet
(average age of aircraft fleet)
Asia(1) Europe / Middle East(1)
Average: 5.78 years Average: 5.46 years
2.82
FY2018
2017 2018 2019 2020
A320 25 23 23 0(*)
A321 26 35 41 42
A321 Neo 1 6 10 22
737 Max 200 0 0 4 28
Total 52 64 78 90
(*) VJC is planning to redelivery A320 Aircrafts to lessors in 2019.
17Products - Services
Reasonable and economical price with varied ticket types for choosing. Added services were
offered, such as check-in priority, boarding priority, hot meals, pre-ordered beverages, and much
more, were made available.
“12pm, It’s time to Vietjet” promotion campaign offered millions of tickets from VND0 to bring
flying opportunities for domestic and foreign passengers
Travel insurance products to minimize travel risks were adjusted and sold to passengers via
www.vietjetair.com
Our Skyshop continued to improve its services. Apart from hot meals and typical Vietjet souvenirs,
many seasonal products were purchased onboard by passengers, for example, summertime
products, wintertime products, Tet holiday products, and more.
Duty-free products proved popular on Vietjet’s international flights; a wide-range of cosmetics,
perfumes, alcohols, cigarettes, and more, were sold at reasonable prices
18Vietjet opened 3 direct flights connecting Vietnam to Japan including
Hanoi & Ho Chi Minh City to Osaka, Hanoi to Tokyo (Narita)
19Typical events of 2018
Secretary of the HCMC Party Committee Nguyen
Thien Nhan visited Vietjet on the first working day of
the Lunar New Year 2018.
Signed MOU as JOLCO Deal for 10 A321ceo and
A321neo for 2018 and 2019 with leading bank in
Aviation.
Signed USD7.3 billion agreements with Safran -
CFM, GECAS in France.
Signed an agreement to open a direct route
connecting Vietnam and Australia at Sydney, Australia.
Signed MOU and contract to order 100 new Boeing
aircraft and 50 new Airbus aircraft at Farnborough
International Airshow 2018
Signed the contract for 50 additional Airbus aircraft
and MOU’s service for long-term engine support.
20Typical events of 2018
Celebrated the third anniversary of the
Vietnam-Taiwan service operation
Strengthened cooperation at the ACMECS
2018 Economic Cooperation Strategy
Summit and 2018 CLMV Summit.
Attended the 74th International Air
Transport Association (IATA) Conference
Launched Vietjet's first ever flight
connecting Vietnam and Japan linking
Hanoi with Osaka (Japan) in November 8
and the route Ho Chi Minh City - Osaka
(Japan) in December 14.
Operated international flights at the new
terminal T2 in Cam Ranh International
Airport.
21Typical events of 2018 – Vietjet Academy
In Q2/2018, Vietjet has finished the
construction of Aviation Academy in
cooperation with Airbus, which been
installing equipment to be in operation
in the next quarter, ensuring a stable
training, reducing time and cost of
regular pilot training.
22Typical events of 2018
President & CEO Vietjet attended and gave
an inspirational speech at World Economic
Forum on ASEAN 2018.
Vietjet President & CEO Nguyen Thi Phuong
Thao was the only female entrepreneur
who represent for Vietnam to attend
Forbes Global CEO Conference, she also was
listed as one of Forbes' Top 100 most
powerful women of the world for three
consecutive years.
President & CEO Nguyen Thi Phuong Thao
was named among 50 who defined 2018
by Bloomberg.
At the ASEAN Business Awards 2018,
President & CEO of Vietjet was honored as
the best business woman in both of
Vietnam and the ASEAN region.
23Community events of 2018
Organized 'Vietjet Sky Career Festival 2018' Career
Fair in Thailand
Accompanied with U23 Vietnam football team,
Miss Universe and Miss Vietnam and Miss Grand
Thailand 2018…
Accompanied with Youth Theatre of Vietnam in
‘Flying dreams’ program
Vietjet and Vietnam Youth Union’s Central
Committee, National Volunteer Centre launched
“Let’s clean up the ocean” 2018 campaign
Cooperated with Vietnam Peacekeeping
Department
24Community events of 2018
Vietjet's relief aid flight for victims
of the double disaster landed at
Indonesia
Launched the biggest program
“Love connection – Love is real
touch”, with hundreds of free
tickets and attractive activities
until 27/2/2019.
Joined Kizuna Ekiden Run 2018 to
raise the awareness for Traffic
Safety
Vietjet and the Central Ho Chi
Minh Communist Youth Union, the
National Volunteer Center
organized a series of special
events celebrating International
Volunteer Day 2018
25Vietjet has launched "Love connection – Love is real touch" - the biggest
promotion in Asia with millions free air-travel opportunities across Asia
26
26Awards
Being awarded the Third-Grade Labor Order of State President for outstanding achievements in
charity and humanitarian work and contributions to the country's development.
Won the Top Airlines by Absolute Passenger Growth in Southeast Asia at Changi Airline Awards
2018
Top 10 Sustainable Development Businesses as recognized by Vietnam Economic Times’ Editorial
Board and readers
Top 100 Best Places to Work in Vietnam voted by Anphabe and Nielsen
Awarded the world's highest ranking for safety with 7-stars from the world's only safety and
product rating agency AirlineRatings.com
27Awards
Listed at the top companies of Nhip cau Dau
tu Magazine “Vietnam’s 50 Best –
performing Companies 2017”, being on “the
Billion-Dollar Club” of companies which have
market capitalization of over USD1 billion.
Being honored as one of the Vietnam's 50
best listed companies in 2018 by Forbes
Being awarded "Best Ultra Low Cost Airline
2019" for two consecutive years
Honored as “Pioneering Airline” at The Guide
Awards 2018
Being honored with Asia's Best Flight
Attendant Wardrobe at NOW Travel Asia
Magazine awards ceremony in Chengdu City
(China)
Honored as “The best customers’ choice
airline award” at award ceremony of Cool
Product Awards 2018
28Awards
Ranked among the world's 50 best airlines (in the 22nd) by Airfinance Journal, one of the leading
magazines in the aviation finance sector.
29Vietjet Bikini 2019 -Blooming in the sky
30
30Vietjet has been awarded the world's highest ranking for safety with 7-
stars from the world's only safety and product rating agency
AirlineRatings.com
31Definitions And Abbreviations
Term Description
ASK Available Seat Kilometer
CASK Total Cost (excluding cost of aircraft sold) per Available Seat Kilometer.
CASK ex-fuel Total Cost (excluding cost of aircraft sold, fuel) per Available Seat Kilometer.
RASK Total Revenue (excluding Revenue from sale aircraft) per Available Seat Kilometer.
EBITDA Earning before Interest, Tax, Depreciation and Amortization.
EBITDAR Earning before Interest, Tax, Depreciation and Amortization, and Rent.
Load Factor Passenger Carried / Capacity.
LCC Low Cost Carrier
OTP On Time Performance.
RPK Revenue Passenger Kilometer.
Capacity Available seat
Aircraft Average numbers of hours during each 24-hour period that an aircraft is actually in
Utilization flight
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