The aviation fuel market in Vietnam is currently dominated by two major players: Skypec, a subsidiary of Vietnam Airlines, and Petrolimex Aviation, a subsidiary of Petrolimex. Skypec, established in 1993, became a limited liability company in 2010 and has been under the Vietnam Airlines umbrella ever since.
As a subsidiary of Vietnam Airlines, Skypec boasts a storage system of over 210,000 cubic meters and operates in 18 domestic airports and 4 major international airports in South Korea. With a capacity to serve over 214,000 flights and an annual production of over 2 million tons, Skypec accounted for 30% of Vietnam Airlines’ revenue pre-pandemic.
Skypec is a subsidiary of Vietnam Airlines and may soon become a part of the Vietnam National Oil and Gas Group.
In 2022, Skypec achieved a production of over 1.25 million tons of fuel, nearly doubling its output from 2021. The company’s revenue tripled to 32,940 billion VND, averaging over 90 billion VND per day. This revenue surpasses pre-pandemic levels in 2018 and 2019.
Skypec recorded a pre-tax profit of more than 281 billion VND in 2022, the highest profit for the company since the pandemic significantly impacted the aviation industry.
According to Vietnam Airlines’ latest annual report, in 2023, Skypec’s total production quickly recovered to over 1,477,000 tons, with revenue reaching 33,450 billion VND and a pre-tax profit of over 176 billion VND, resulting in an ROE of 22%.
In mid-2023, the government directed the handling of the transfer of Skypec from Vietnam Airlines to the Vietnam National Oil and Gas Group (PVN) to support the restructuring of Vietnam Airlines and enhance PVN’s efficiency in the production and supply of gasoline.
2023: Petrolimex Aviation Profits 112 Billion VND
Petrolimex Aviation, established in 2008, has continuously developed and expanded its network. With 7 branches operating in 9 large domestic airports and over 50 airports worldwide in more than 20 countries and territories, they serve approximately 65 domestic and international customers.
In 2019, Petrolimex Aviation became a member of JIG, the world’s leading organization for aviation fuel supply standards, with over 100 members worldwide, operating in over 2,750 airports.
Petrolimex Aviation is considered Skypec’s direct competitor in Vietnam’s aviation fuel industry.
Petrolimex Aviation provides fuel and refueling services to over 50 domestic and international airlines, including Vietjet Air, Bamboo Airways, Hai Au, and Japan Airlines.
Petrolimex Aviation, the fuel subsidiary of Petrolimex, reported a remarkable pre-tax profit of 846 billion VND in 2019, representing a 195% growth, and an ROE of 58%. In 2021, the company’s pre-tax profit reached 148.9 billion VND.
In 2022, Petrolimex Aviation recorded a pre-tax profit of 448 billion VND. The following year, in 2023, the company achieved a production of 1,290,788 tons and a pre-tax profit of 112 billion VND.
Fuel Prices Directly Impact Airfare
According to IATA data, the price of Jet A1 fuel in the Asia region on April 26, 2024, was 100.25 USD per barrel. The Civil Aviation Authority of Vietnam calculated that with the fluctuation in Jet A1 fuel prices and the USD/VND exchange rate, fuel costs for airlines in April 2024 increased by 56.55% compared to December 2014 and 74.27% compared to September 2015. This has led to a total cost increase of 37.66% compared to December 2014 and 53.24% compared to August 2015 (when the regulations on domestic flight fare frames were issued).
In April 2024, the price of Jet A1 aviation fuel in Asia was 100.25 USD per barrel, similar to the price in April 2023 (100.17 USD per barrel). However, the exchange rate in April 2024 (1 USD = 25,454 VND) showed an increase of 8% compared to April 2023 (1 USD = 23,620 VND). Given that approximately 75% of airlines’ costs are in foreign currencies, the impact of the exchange rate change alone has increased their expenses by nearly 6% compared to the previous year.
