HO CHI MINH CITY -- Vietnamese low-cost carrier Vietjet Air is aiming for a 36% profit jump on hefty 53% revenue growth this year, ambitious targets that won shareholders' blessing Thursday.
Those goals translate to 42 trillion dong ($1.8 billion) in revenue and 3.3 trillion dong in net profit.
Shareholders, at their annual meeting, also approved management's proposal to raise the upper limit of foreign ownership to 49% from the current 30%. The approval lets the airline submit its request to lift the cap to regulators. With this step, Vietjet hopes to attract more foreign investment and increase its capacity for capital funding.
In 2016, Vietnam's first private airline logged a profit of 2.4 trillion dong, up 113% year on year, on total revenue of 27.4 trillion. Vietjet has prospered since its founding in 2011, riding the fast-growing economy in a country of 90 million with little competition. No new entrants entered the market, and no foreign carriers fly domestic routes.
Going forward, competition is set to intensify as Vietnam gradually opens the air travel market to foreign investors. The sector is expected to grow at an average annual rate of 20% to reach 102 million passengers by 2020. The bold targets mean Vietjet aims to outperform industrial growth this year.
Fuel-related costs are rising, but Vietjet plans to absorb them by achieving high growth in revenue and profit. "Vietjet is confident to reach the targets thanks to its competitive cost structure," said Managing Director Luu Duc Khanh.
This year, the airline will boost flights at five airports -- Tan Son Nhat in Ho Chi Minh City, Noi Bai in Hanoi, Da Nang, Cam Ranh and Cat Bi -- serving the top tourist destinations in the country. Vietjet also will expand its international network, open new routes to Northeast Asia and enter into code-share and interline arrangements with airlines flying to European and American destinations.
Its flight network will increase to 78, with 41 domestic and 37 international routes. The carrier expects to expand its air fleet to 51 and carry 17 million passengers in 2017.
Vietjet shares closed at 131,000 dong on Thursday, 21% higher than its first day trading on the main bourse.