Since the COVID-19 pandemic appeared, the aviation industry has been severely affected, especially in the passenger transport sector. This year, airlines assess the market situation is worse than last year when two pandemic waves appeared in two peak periods, the Lunar New Year and the summer. In particular, the epidemic is currently happening extremely complicatedly in Ho Chi Minh City, the country’s economic center.
Although the profit decreased slightly, it still remained at a high level
Contrary to transportation companies such as Vietnam Airlines, Vietjet Air, Bamboo Airways, and other passenger-related derivative services companies, the cargo service sector is not much affected.
In fact, profits of some large cargo service companies such as Tan Son Nhat Cargo, Saigon Cargo Services, or Noi Bai Cargo decreased slightly but remained at a high level. Specifically, the two biggest profit companies in this segment were Tan Son Nhat Cargo with an after-tax profit of VND 430 billion and Saigon Cargo with a profit of VND 464 billion last year.
The peculiarity of cargo service companies is that they occupy a monopoly position in providing services at airports. The main sources of revenue for companies come from cargo handling, cargo handling, storage, some with additional rental properties, etc.
Commodity service companies have impressive profit margins. Tan Son Nhat Cargo has maintained its net profit margin on sales at 50% for many years. Saigon Cargo even reached 67% last year. The second group includes ALS Cargo and ACSV (belonging to ACV) with a rate of 47-48%. The lowest among cargo service companies is Noi Bai Cargo, reaching about 31%.
Airlines increase freighter fleets
The freight transport industry is less affected by the pandemic, especially compared to passenger transport. In the context of the current complicated epidemic situation, both Vietnam Airlines and Vietjet Air are strengthening their freight fleets to contribute to increasing revenue.
Vietnam Airlines is the first airline in Vietnam to transport goods in the cabin and remove passenger seats to carry goods in the context of the COVID-19 epidemic. Specifically, this airline said that it has removed the seats of 7 aircraft for freight transport. In June alone, the national airline’s freight revenue even surpassed passenger transport revenue. Under normal conditions, the proportion of cargo/passenger accounts for only about 10%.
Recently, the management of Vietnam Airlines said that they are studying a plan to build a cargo airline after the pandemic ends.
Read more: Vietnam Airlines intends to launch a cargo airline