VietJet looks to be one of the very few airlines that made it through 2020 with profit in the bank. While the official results are yet to be released, its CEO Nguyen Thi Phuong Thao says that the figures will be positive. It will also become one of the very few airlines that did not need to lay off or furlough staff during the pandemic; she explained how this was achieved.
VietJet stays strong through 2020
Low-cost Vietnamese airline VietJet has somehow come through COVID so far unscathed. Not one employee has lost their job, and although the year’s results aren’t yet published, they are expected to end the year with a profit.
In an interview for Reuters NEXT virtual conference, chief executive Nguyen Thi Phuong Thao commented,
“We are proud that we have gone through 2020’s pandemic with positive financial results. We didn’t make losses, and made a little profit in 2020. Compare to other airlines in the world, and other airlines in Vietnam, we are one of the very few airlines with positive consolidated financial results in 2020.”
Although the airline was grounded in the early part of the year, from June, it restarted its domestic network, even adding new routes to meet the rising demand in the country. By July, it was flying eight new routes, taking its total domestic network to 52.
Nguyen noted that demand for domestic flying really ramped up during the pandemic. For some markets, she said that traffic was actually around 30% higher than it was in 2019. This helped the airline to continue securing revenue even during the worst of the crisis and puts it in a strong position for 2021.
“We hope that in 2021, we will cotinine to invest to receive new and modern aircraft. We will invest more than in 2020.”
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Switching staff focus to training
Explaining how, despite the lack of international travel, no employee had been laid off, Nguyen gave some insight into the airline’s employee retention strategy. She said that, rather than having people with no work to do, VietJet switched instead to a big push on training. She said,
“We can be proud to be one of the very few airlines in the world that does not have a staff reduction policy. But we arranged so that everyone can participate in training and activities so everyone will be prepared when the airline industry bounces back after the pandemic.
“This is a golden time for our staff to focus on training. In 2020 we conducted approx. 27,000 training sessions, half of which is online training.”
Usually, VietJet’s team are paid on a results-based agreement. This year, those results have been the outcomes of their training programs. This, combined with a small reduction in working hours for some groups, including pilots, has allowed the airline to avoid layoffs for the entire year.
Still hopeful for government support
Although VietJet has not had any direct support from the Vietnamese government, it has availed of some of the other measures extended to airlines during 2020. These have included reduced fees and taxes, as well as the ability to defer tax payments. Nevertheless, Nguyen believes that there is still an opportunity to receive support from the government.
She noted that flag carrying competitor Vietnam Airlines had received a sizeable bailout by the government. Further, she noted that thanks to its success, VietJet’s tax payments are usually around two-thirds of the amount Vietnam Airlines received. Nguyen noted that applications were still under consideration and commented,
“We hope the government will make the right decision.”