HO CHI MINH CITY -- Vietnamese budget airline Vietjet eked out a 2020 profit after tax of 70 billion dong ($3 million) , despite the headwind in the travel industry due to the coronavirus pandemic, thanks to a shift to cargo as Asia's exporters seek alternatives to skyrocketing container costs.
The carrier's full-year profit was less than 2% of the one earned the previous year, and revenue was down 64% to 18.2 trillion dong. Yet in the quarter ended in December, it reported profit of 995 billion dong -- up 84% compared to the fourth quarter in 2019 -- although revenue shrank by a third due to a decline in passengers.
The company was able to increase profit in the fourth quarter after freight revenue jumped 75%. Through deals with UPS and other partners, Vietjet began flying products to Europe and the United States during the pandemic, the company said Sunday, "making it one of the few airlines in the world having no workforce reduction and turning a profit."
Founded by Nguyen Thi Phuong Thao, the communist country's first female billionaire, Vietjet started transporting more products than passengers after COVID-19 halted most cross-border travel last year.
Vietnam's low coronavirus tally allowed the economy to stay open and domestic flights to keep crisscrossing the country in 2020.
But it is now coping with its fastest-spreading outbreak, including a record 91 cases Thursday, casting a pall on the otherwise quick recovery. Hanoi approved a half-billion-dollar bailout for Vietnam Airlines, while local media reported that Vietjet and rival Bamboo Airways have requested state aid.
Shares of both Vietjet and Vietnam Airlines were down roughly 2% in Monday morning trading as the ruling Communist Party, which has just elected its leaders for the next five years, works to limit the impact of the latest virus surge.
Vietjet said it conducted 78,462 flights in 2020, down from 139,000 in 2019.
With fewer travelers on board, the airline reconfigured planes to carry goods instead, pooling shipments around Asia and forwarding them to customers in the West. As Europeans and Americans in lockdown shop more online, companies in Asia have struggled to secure shipping containers to fill orders. The container shortage has caused prices to soar. The rate on a 20-foot container sent from Shanghai to Europe, for example, has shot up fourfold to $4,400.