THE GIANT BEHIND VIETRAVEL AIRLINE – NEW PLAYER PLANS TO TAKE DOMESTIC FLIGHTS THIS YEAR

Vietravel was established in 1992, formerly known as the Tracodi Tour Center under Transportation Development Investment Corporation (Tracodi). In 1995, the Tracodi Tour Center officially developed into an independent enterprise named Transport Marketing and Tourism Company (Vietravel), under the Ministry of Transport.

In 2010, Vietravel transformed into Vietnam Transport Marketing and Tourism Ltd Company (Vietravel) and in 2014 officially changed its company type to joint stock company.

Over 25 years of development, Vietravel currently has 30 offices, centers and branches across the country. Vietravel is also awarded honor titles from domestic and foreign corporations, media and press agencies such as : TAA award (Tourism Alliance Awards), “The Friends of Thailand 2010” award, Asia’s leading travel magazine awarded “Best Travel Agency Vietnam 2011”.

The year 2020 marks the 25-year milestone of the Vietravel development journey. The company continues to affirm its position along with service quality and prestige with the orientation to 2030 to become a leading airline and travel corporation in the area.

Shareholders in Vietravel’s ownership structure share a close relationship with Chairman Nguyen Quoc Ky 

On 27th September 2019, stock code of Vietravel was officially traded on UPCoM to successfully raise capital for the Vietravel Airlines aviation project. Vietravel’s capital has increased by more than VND 200 billion, reaching VND 708 billion, exceeding the minimum level of VND 700 billion to establish an international airline.

In terms of ownership structure, Vietravel is currently owned by 2 major shareholders, accounting for 25.29% of its charter capital. The Chairman of the BoD, Mr. Nguyen Quoc Ky, owns more than 9% and the International Travel and Saigon Travel Service Company (SG Travel) owns 16.22% of its capital.

Mr. Nguyen Quoc Ky who used to hold the position of General Director of Tourism Department – Ministry of Culture, Sports and Tourism, is the founder and Chairman of the BoD of Vietravel. 

Saigon Travel and Travel Service Company, also known as SG Travel, is an important partner of Vietravel, operated by the chairman Nguyen Nguyet Van Khan. Ms. Khanh is the daughter of Mr. Nguyen Quoc Ky, and has also been a member of the Vietravel BoD since 2015.

One of the Board members of Vietravel also is Mr. Nguyen Luu. Mr. Luu, the brother of Mr. Nguyen Quoc Ky, serves as a member of the BoD. Mr. Nguyen Quoc Ky is also the Chairman of Sapphire Island Tourism and Trade Investment Jsc. – a subsidiary of Vietravel established in April 2016.

In addition, other 4 members of the Vietravel BoD are CEO Tran Doan The Duy, Vo Quang Lien Kha, Nguyen Thi Le Huong and Nguyen Minh Ngoc holding 4.2%, 4.19%, 4.18% and 4.11% capital respectively.

Vietnam’s aviation industry post Covid-19 pandemic and Vietravel Airlines turn its dream in reality

Vietnam tourism is considered a key economic sector with many potentials. The year 2019 is a successful milestone for Vietnamese tourism shown not only in the number of international and domestic tourists but also revenue achieved. However, the Covid-19 pandemic had a relatively tremendous impact on the Vietnamese economy, of which the aviation industry was heavily affected.

According to data from the Ministry of Culture, Sports and Tourism, international tourists visiting Vietnam in the first nine months of 2020 reached 3.68 million, a decrease of more than 67% compared to the same period in 2019. Domestic tourists reached 37.5 million. Total revenue from tourists is estimated at 233,000 billion, down more than 53% over the same period in 2019.

Only in October, the number of operating flights in October in Vietnam decreased by 37%, recording 263 thousand flights. Five Vietnamese airlines have decreased in the number of operating flights. In which, Jetstar Pacific saw the strongest drop, nearly 70% with 904 flights; VietJet Air reduced 61% with total flights of 4,600 flights; Vietnam Airlines decreased 31% with the total flights of 7,300 flights.

Although the Covid 19 situation severely affected the international aviation industry in general and Vietnam in particular, the Vietnamese domestic market has witnessed gradual recovering signals. Airlines are also preparing plans to try to improve their resilience as international flights recover.

Vietravel is currently taking advantage of the tourist market from its parent company, including domestic and foreign customers. The company’s popular customers are a number of agencies and organizations, at the same time exploiting the potential customer market are students. In addition, the number of customers in the passenger market GIT (Group Inclusive Travelers) and FIT (Frequent Independent Travelers) is now maintained to fully exploit the travel tourism and transportation segment.

Vietravel’s potentials lie behinds the ambition of encroaching on the aviation industry

In 2018, Vietravel achieved revenue of 7,233 billion dong and reported after-tax profit of 58 billion dong, up 17% and 56% respectively over the previous year. The company served more than 852 thousand visitors, up 8%. According to statistics from 2014 to 2018, Vietravel’s revenue steadily increased by about 1,000 billion VND per year.

In 2019, the number of Vietravel visitors reached 891,000 arrivals, revenue reached more than 7,400 billion VND, contributing 105 billion VND to the national budget. Revenue and profit both increased slightly compared to the target of 8,600 billion VND in revenue and 60.8 billion VND in profit after tax.

By the second quarter of 2020, net revenue of Vietravel recorded only 205 billion VND, less than 10% compared to the same period last year. At the end of the first 6 months, Vietravel reached nearly 1,000 billion VND of net revenue, down 72% over the same period. The company reported a loss after tax of nearly 80 billion VND. In 2020, Vietravel sets a 3,000 billion VND revenue target, equivalent to a decrease of nearly 60% compared to the previous year. 

The main reason is that the business activities of Vietravel were interrupted due to the impact of Covid-19. The overseas tourism segment, which accounts for more than 70% of Vietravel’s revenue so far, continues to be paralyzed because of social distancing. In addition, the second wave of Covid-19 in the end of July 2020 in Da Nang, Quang Nam continues to have a strong impact on the operations of this business.

Development orientation of Vietravel in recent years

Vietravel Airlines plans to take off in 2020 

Recently, the government has officially approved an air transportation business licence to Vietravel Airlines, the subsidiary of Vietravel operating in the field of air cargo and transportation, with a charter capital of 700 billion VND.

According to the Civil Aviation Administration of Vietnam, Vietravel Airlines’ documents meet the legal conditions for issuing an air transport business license including capital conditions, organizational structure and development strategy. The documents were proposed to the Ministry of Transport to implement the next procedures to license this company.

According to the plan, the operating model of Vietravel Airlines is charter flights. Vietravel Airlines has prepared an investment plan since October 2019, expected to start operating commercial flights in the last month of 2020 or at the latest in the first half of 2021. After coming into operation, Vietravel Airlines will operate 3 aircraft in the first year, particularly A320, A321 or B737 aircraft models. The number of aircraft in operation of this company will gradually increase and reach 8 in the 5th year of operation to accomplish the mission of creating jobs for nearly 600 employees. contribute to the national economy.

Focus on developing MICE tourism

MICE tourism (the type of tourism combining conferences, seminars, exhibitions, event organization, rewards for employees and partners) is a very interesting market with a turnover value six times higher than normal tourism. Some countries in the regional area such as Singapore, Thailand, Malaysia, and China invested to expand their businesses. 

As one of the major travel brands in Vietnam, Vietravel takes their strong steps in the tourism market of MICE. Vietravel promotes the professional domestic MICE tourism market with available advantages from natural landscapes, cultural heritages, and the hotel and resort system which has developed quite rapidly.

According to data from Vietravel, in the first 7 months of 2019, the company has served more than 273,000 visitors in the form of MICE tourism, accounting for nearly 84% of total number of MICE guests. More than 21,000 visitors have come to Vietnam to visit or attend seminars and conferences. Vietravel strives to achieve an average growth rate of over 20% per year, focusing on developing MICE as the inevitable trend of the market.


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