Vietjet self-serves ground, giant SAGS "loses" 40% of revenue

(Dan Tri) - Vietjet brings in 39-40% of SAGS's revenue and about 20% of its profit. After Vietjet leaves, SAGS is looking to fill the gap by finding new customers, expecting a recovery in 2026.

Losing a big customer, this year's business plan is reduced

This morning (June 20), Saigon Ground Services Joint Stock Company (SAGS - stock code: SGN) held the 2025 annual general meeting of shareholders.

One of the issues that shareholders paid attention to at the meeting was that SAGS had terminated the full ground service contract with Vietjet Aviation Joint Stock Company (Vietjet) since the second quarter of this year. The termination location was Tan Son Nhat International Airport. The reason given by SAGS was that Vietjet would provide ground services at this airport itself.

Vietjet self-serves ground services, "saying goodbye" to SAGS (Illustration: SGN).

After losing a major customer, SAGS plans to see both revenue and profit decrease in 2025. Specifically, revenue will decrease by 11% to VND1,392 billion, and after-tax profit will decrease by 41% to VND159 billion.

The Board of Directors aims to find customers and develop new services to increase revenue, prioritize the implementation of contents for expanding production and business at Long Thanh airport, promote debt collection...

Responding to a shareholder question about the impact of losing a major customer, Mr. Nguyen Cao Cuong - Chairman of SAGS - said that Vietjet brings in 39-40% of the company's revenue and about 20% of its profit. However, a large airline in terms of scale, number of aircraft, market share and shifting to self-service on the ground is appropriate.

According to Mr. Cuong, after Vietjet left, this airline rented equipment that SAGS had not used yet, for a 3-year lease, at nearly 4 billion VND per year. If deducting depreciation, the company made a profit, not a loss.

SAGS Chairman said that to serve Vietjet, the company needs more than 300 domestic employees. After the airline left, SAGS kept 90 people for Vietravel Airlines, a part for the Long Thanh airport apparatus and some reserves to prepare to serve another domestic airline. About 200 people have gone to work at Vietjet.

Mr. Cuong admitted that after Vietjet left, SAGS's revenue was expected to decrease and the average salary of its employees would also decrease. However, the board of directors proposed to keep the average income of 24 million VND/person/month as last year, so the incurred expenses were about 50 billion VND. Therefore, this year's profit decreased more than the decrease in revenue.

Explaining to shareholders about trying to keep workers' salaries at the same level, he said he wanted to retain workers for future projects. At the same time, the board of directors did not want to reduce workers' income while the company was still profitable, otherwise it would be unreasonable.

To make up for the lost revenue and profit from Vietjet, Mr. Cuong said that SAGS has been looking for new customers. Recently, the company won a ground service contract for an airline in the US, with revenue of 60 billion VND/year, profit of about 10-20 billion VND and will increase over the years.

At the same time, SAGS is also negotiating with Sun PhuQuoc Airways to provide services at the airport. Mr. Cuong is confident that he can negotiate and the possibility of success is high. If successful, SAGS will have an additional revenue of about 200 billion VND/year, a relatively large profit.

In addition, the Chairman of SAGS also noted that in 2026, the company will return to the revenue and profit figures of 2024 and try not to reduce workers' income.

Expanding operations at Long Thanh airport

Regarding business activities at Long Thanh airport, at the end of 2024, the SAGS consortium with Hanoi Ground Services Joint Stock Company (HGS) won the bid for the Investment Project for construction and business of repair and maintenance services for aviation vehicles, equipment and ground technical commercial services No. 2 at this port.

The company's board of directors identified the business expansion strategy at Long Thanh airport as a key task.

In 2024, SAGS's revenue increased by 4% and profit after tax increased by 13%, reaching VND 1,565 billion and VND 270 billion, respectively. The company must set aside provisions for bad debts with Bamboo Airways and Vietravel Airlines.

Also in 2024, SAGS negotiated and signed a ground service contract and welcomed 10 international airlines to operate at three international airports: Tan Son Nhat, Da Nang, and Cam Ranh.

Source: https://dantri.com.vn/kinh-doanh/vietjet-tu-phuc-vu-mat-dat-ong-lon-sags-bay-40-doanh-thu-20250620134520837.htm