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|Vietnam's top budget airline Vietjet will extend its regional reach|
On April 26, Vietjet Air held the 2018 annual general shareholders’ meeting in Ho Chi Minh City and commemorated its 10th anniversary. Vietnam’s first private airline revealed that it will focus on overseas routes this year, as international travelling is a vast market for budget carriers and Vietjet hopes to boost its influence in the region.
In particular, Vietjet will launch 16 new international routes in 2018, with a focus on East Asian destinations. The budget airline will debut in Japan in the third quarter, while expanding its routes in current markets such as China, Taiwan, and South Korea. At the same time, Vietjet will boost its code-sharing or inter-lining collaborations with other airlines in the region, especially those who fly to Europe and North America.
According to CEO Luu Duc Khanh, Vietjet is also doing research on potential new markets, such as India, Indonesia, and Russia. Feasibility studies for Australia are also underway, said the CEO.
“Our profit margin for international routes is at least 20 per cent higher than Vietnamese routes, as petrol prices in overseas markets are 30 per cent cheaper than Vietnam and charges for overseas services are also higher,” said chairwoman Nguyen Thi Phuong Thao. The businesswoman, who is Vietnam’s first female billionaire, added that the country is becoming more popular among foreign tourists, creating fresh opportunities for budget carriers.
If all goes to plan, Vietjet will operate a total number of 100 routes in 2018, including 39 domestic and 61 international routes. Four new domestic routes will be introduced this year. The fleet’s size will increase to 66 to serve 24 million passengers.
To boost its business activities and slash operating costs, the airline said it will also seek partnerships with petrol companies. In January, Sovico Holdings, another company owned by Nguyen Thi Phuong Thao, has made a bid to become a strategic investor at PV Oil Corporation, Vietnam’s second largest oil retailer.
In 2018, Vietjet plans to earn VND50.9 trillion ($2.2 billion) in revenue, up 20 per cent from last year, and VND5.8 trillion ($254 million) in pre-tax profit, up 9.5 per cent.
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