VJC – Update – 20180516

• During 1Q2018, VJC continued to expand its fleet by adding four new A321s, increasing its total fleet size to 54 aircraft at the end of Q1. High demand in the Tet holiday peak season appeared to put more pressure on VJC’s fleet compared to 1Q17. We expect this elevated demand to be sustained during the year, helping VJC to pass on incremental fuel costs to customers. However, we reduce our TP and re-rate to REDUCE as VJC’s premium to regional peers now looks outsized.
• We expect VJC to be able to pass through FY18F incremental fuel costs thanks to growing demand.
• In 2018, VJC will continue to expand its international network to reach 60 international routes (+36.4% yoy) by the end of 2018.

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