INDIVIDUAL ESSAY 1

INTERNATIONAL
BUSINESS STRATEGY

Lecturer: Bùi Thùy Dương

Class: IB1703
Team 4:

Nguyễn Thị Phương HS163305 Part 1+2

Vũ Tùng Dương HS163107 Part 3
Nguyễn Thị Thanh Thanh HS163179 Part 4
Phạm Anh Thư HS160801 Part 5
Nguyễn Anh Quân HS160054 Part 5
Phạm Huy Hoàng Sơn HS160214 Part 6
 TABLE OF CONTENT

1. BACKGROUND OF THE COMPANY ................................................................ 2

2. THE SCOPE OF YOUR ANALYSIS .................................................................... 5

3. ENVIRONMENTAL ANALYSIS ........................................................................ 20

4. SWOT ANALYSIS ................................................................................................ 27

5. FIVE FORCES ....................................................................................................... 39

6. CONCLUSION....................................................................................................... 47

7. REFERENCES ....................................................................................................... 50

8. GRADES ON GROUPMATES ............................................................................ 54

1
I. BACKGROUND OF THE COMPANY (31)

1. Company Name

Vietnam Airlines is the name of the national airline company of Vietnam. Founded in 1956, the
company has become one of the largest and most important airlines in Southeast Asia.

2. Headquarters

The head office of Vietnam Airlines is located in Hanoi, Vietnam. This is where the managerial
and executive activities of the company are carried out.

3. Profession

Vietnam Airlines operates in the aviation industry. The company specializes in transporting
passengers and cargo by air.

4. Main products and services

Vietnam Airlines provides passenger and cargo transportation services on both domestic and
international flights. The company provides regular flight services to passengers, providing
business class and cargo services. In addition, Vietnam Airlines also provides additional services
such as customer support and online booking to ensure the most convenient and best flight
experience for customers.

5. Main products and services

Vietnam Airlines provides passenger and cargo transportation services on domestic and
international flights. The company offers scheduled flight services, business class services, cargo
services, and additional services such as customer support and online booking. In addition to
passenger services, Vietnam Airlines also transports goods by air services. The airline has a
subsidiary called Vietnam Airlines Cargo, which specializes in domestic and international freight.

6. Target market

Vietnam Airlines targets international and domestic markets.

2
 For the international market, the company focuses on creating an extensive flight network,
connecting Vietnam with other international locations around the world. Vietnam Airlines aims to
expand its operations in the international market. The company focuses on building and
maintaining an extensive flight network, connecting Vietnam with other international locations
around the world. The joint venture thrives as partners in the Sky team as well as other partners.
Vietnam Airlines is a member of SkyTeam, a global airline alliance that provides passengers with
access to an extensive route network around the world. This partner allows for convenient travel
and receives the benefits of a permanent residence program for passengers flying with any member
airline.

For the domestic market, Vietnam Airlines provides passenger and cargo transportation services
between cities and regions in the country.

The combined development in both these markets allows Vietnam Airlines to serve a diverse
customer base and expand its scope of operations in the aviation industry.

7. Countries where the company operates

Vietnam Airlines operates mainly in Vietnam. However, the company also has an international
flight network serving destinations in Asia, Europe, North America, and Australia.

Over the past 20 years, with an average annual growth rate that has consistently reached double
digits, Vietnam

Airlines has continuously grown and risen to become a reputable airline in the region thanks to the
strength of modern fleet, extensive route network and convenient connecting schedule, especially
in Indochina. Starting with irregular domestic flights, Today, Vietnam Airlines has operated to 21
provinces and cities across the country and 28 international destinations in 26 countries and
territories. Vietnam Airlines is proud to own the densest and most convenient domestic and
Indochina route network for customers.

In order to create a premise for sustainable development in the future, Vietnam Airlines has
implemented a fleet development strategy in the direction of prioritizing the selection of aircraft
using advanced technology in the world civil aviation industry. In recent years, the airline has

3
placed new orders, upgraded the current fleet to meet the goal of becoming a major airline in the
region, expanding its fleet to 101 aircraft in 2015 and 150 aircraft in 2020 with a variety of
technologically advanced aircraft, fuel-efficient and environmentally friendly such as Airbus
A350XWB, Boeing 787-9. As of 2022, the business has achieved revenue of VND 70,578 billion.

4
II. SCOPE OF YOUR ANALYSIS

Throughout the years, Vietnam Airlines has received many awards for service quality and
operational quality. The airline has been rated as a prestigious 4-star airline by Skytrax and is
continuously improving its services, expanding its fleet and improving the overall passenger
experience. As Vietnam's national airline, Vietnam Airlines plays an important role in connecting
the country to the world, promoting tourism, and facilitating trade and economic development.

To analyze the scope of Vietnam Airlines, we will focus on the regional level of the company,
focusing on the potential market of some key countries, namely the domestic market of Vietnam,
i.e. will focus on the factors and situation of this airline in the domestic context of Vietnam. This
will allow us to have an overview of Vietnam Airline's position and operations in the domestic
market with its leading position as a Vietnamese airline. In this study, the scope considered is the
business practices of the enterprise compared to domestic competitors; As well as studying the
demand for the air transport market in our country's social economy, potentials that can help firmly
step on the path of integration, really contribute to the socio-economic development of the country

1. Location and scale (15, 16)

The analysis will include information on Vietnam Airlines' position in Vietnam's aviation industry:

Vietnam Airlines is the airline with the largest domestic route network, in addition to operating
and cooperating with airlines, operating international passengers to combine domestic flights. The
domestic market is mainly competed by airlines such as VNA, JPA, Bamboo and Vietjet Air. In
particular, JPA is a subsidiary of VNA, operating under the model of a low-cost airline, operating
on domestic and international regional routes with low-cost competition and closely coordinating
with VNA on products and supporting the sharing of exploitation resources.

Determine Vietnam Airlines' position in Vietnam's aviation industry, including market share and
competitive position compared to other airlines such as Vietjet Air and Bamboo.

5
 Assess Vietnam Airlines' coverage in domestic and international markets, including the number of
routes and destinations they serve.

2. Financial situation (17, 18, 19, 20)

Vietnam Airlines' financial analysis, including revenue, profitability, asset and debt structure,
business performance and other key financial indicators.

Vietnam Airlines Corporation - Joint Stock Company (code HVN-HOSE) announces the
explanation of the difference in profit after tax in Q1/2023 compared to Q1/2022.

Accordingly, by the end of Q1/2023, HVN recorded net revenue of nearly VND 23,500 billion,
double the same period (VND 11,620 billion), gross profit reached more than VND 1,959 billion
(same period loss was nearly VND 1,595 billion); Other profit loss was nearly VND 38 billion
(same period profit was more than VND 121 billion) and profit before tax reached more than VND
19 billion.

However, after deducting tax, HVN recorded a loss after tax of VND 37.33 billion, down 99%
over the same period (-VND 2,686 billion) - of which the parent company's profit after tax lost
more than VND 137 billion, down 94% over the same period (-VND 2,443 billion).

6
 At March 31, 2023, HVN had 2.846 billion cash and cash equivalents. Short-term debt increased
by VND 1,500 billion to nearly VND 55,000 billion, of which short-term financial loans and leases
stood at VND 13,700 billion; undistributed profit after tax -34,303 billion VND; equity -10,239
billion.

The market recovered, Vietnam Airlines reduced losses by 99% in Q1/2023 over the same period.

3. Development strategy and plan (21)

Vietnam Airlines' strategy has achieved a lot of success thanks to its vision and non-stop creativity
in planning the right and effective direction.

- The philosophy of Vietnam Airlines' strategy is to harmoniously balance business activities with
the interests of shareholders, meeting the needs of economic development of the country. Vietnam
Airlines is committed to:

• Accompany, transparently and publicly disclose information to shareholders.

7
 • Maintain and further enhance channels of open dialogue with shareholders.

• Organize safe, quality and effective business activities and always ensure the interests of all
parties.

- For Vietnam Airlines' strategic objectives, the airline aims to be an airline:

• Top 10 favorites in Asia.

• Top 3 brands in Southeast Asia.

• Strong technology transformation to become a digital airline.

• Maintain and strengthen 4-star service and gradually bring Vietnam Airlines to 5-star airline
standards during its tenure.

• Preferred by Vietnam's labor market.

• Set the goal of maintaining the leading position in terms of market share (over 50% domestic
market share; over 25% international market share) and competitiveness on the basis of
upgrading service quality.

The strategic scope is the basis for planning business strategies and improving competitiveness
indicators. The strategic scope of Vietnam Airlines is the market segments that the airline targets,
especially the target customers of Vietnam Airlines, the regions and geographies where the airline
will provide products. The airline owns products covering all customer segments, from the low-
cost segment, to international 4-star medium and high-end services.

For Vietnam Airlines' strategic business activities, the airline has focused on developing and
improving the following activities:

- Research and development

• Vietnam Airlines has two active research centers with 02 main specialized departments:
Technology & Management Solutions Department and Science & Technology Services
Department, with 20 staff and technical staff.

8
 • Its research center has the role of advising and assisting the board of directors and the general
director. Along with that, the center is also responsible for proposing solutions in technology –
management for application in the field of aviation and providing services for production and
business activities of the company.

- Engineering technology

• Vietnam Airlines invests heavily in technology including:

▪ Promote online check-in via website or mobile applications.

▪ Arrange many self check-in kiosks at airports.
▪ Using new versions of mobile applications with many modern and easy-to-use features,
helping passengers quickly search for flights, book tickets online, look up itineraries, update
promotions,,...
▪ Apply many payment methods using new technology platforms such as: payment by QR code,
online payment SOFORT Banking,...
▪ Equipped with Wireless streaming system right on the A321neo aircraft, bringing a new
entertainment experience to passengers.

Regarding marketing activities in Vietnam Airlines' strategy, this airline has developed and
implemented the following outstanding marketing strategies.

- Positioning the brand as a premium airline.

- Nationwide agent distribution.
- Media and advertising aim to build a "clean" image.

The above marketing strategies have helped Vietnam Airlines reach and expand its market share,
brand positioning and professional image among Vietnamese and international passengers.

4. Customers and markets (customer data) (22)

9
Vietnam Airlines' target customers are men and women, aged 35-45, living in urban areas,
concentrated in big cities, especially tourist cities, earning group A, often traveling for business or
traveling or relaxing.

The portrait of Vietnam Airlines' target customers can be described as follows:

- Demographics:

• Gender: Vietnam Airlines' target customers include both men and women.

• Geographical location: Vietnam Airlines' target customers live in urban areas, concentrated in
big cities, especially tourist cities.

• Age: Vietnam Airlines' target customers are concentrated in the middle-aged group (35-45 years
old).

• Income: Vietnam Airlines' target customers are concentrated in Group A Class income group
(VND 15-150 million or more).

• Education: Vietnam Airlines' target customers are concentrated in the group with university or
post-graduate education.

• Attitude: Vietnam Airlines' target customers are interested in tourism and business.

10
 • Life behavior: Vietnam Airlines' target customers often go on business trips or travel or vacation

- Shopping behavior:

• Where to shop: Vietnam Airlines' target customers often buy services through online channels.

• Shopping occasions: Vietnam Airlines' target customers often use the service on special
occasions (Tet, Holidays, Business Holidays, etc.).

• Purpose of procurement: Vietnam Airlines' target customers belong to the group of Problem
Solving buyers

• Usage behavior: Vietnam Airlines' target customers often use the service 1-2 times / month.

• Psychology: Vietnam Airlines' target customers belong to the group of people with focused,
competent and controlling personalities.

5. Operational performance (23, 24, 42, 43, 09, 43, 44, 45)

Evaluate Vietnam Airlines' operational performance, including indicators of safety, service quality,
reliability, operability and asset management.

- On-time flight rate:

• Vietnam Airlines is the airline with the highest delay rate with nearly 12.5%, corresponding to
14,486 flights. While the previous year (2021), Vietnam Airlines was the second most punctual
airline in the market with a rate of 95%. In 2022, Vietjet has 13,310 delayed flights, a rate of
11.5%, only behind Vietnam Airlines. Two years earlier, Vietjet was the airline with the most
delayed flights.

- Cancellation rate:

• Vietnam Airlines had the highest number of flights with 115,987 flights, Vietnam Airlines
canceled 715 flights (accounting for 0.6% of its total flights) Response rate to booking demand:
According to a representative of Vietnam Airlines, many holiday flights have been booked
almost fullly, mainly on April 29 and May 2. In addition, on nearby days, flights were 60-70%

11
 full... Airlines are continuing to open more seats to serve the rising travel demand of passengers.
Preparing early for this year's summer peak season, Vietnam Airlines will provide nearly
551,000 seats, equivalent to nearly 2,800 flights on domestic routes from April 26 to May 5, a
slight increase compared to the same period in 2022.

- Customer Service Reviews:

• On the ground, when guests arrive at the check-in counter, the airline adds customer service to
assist guests in checking in (with special attention paid to supporting elderly guests, young
children, people with weak health); additional happy birthday services at the check-in counter;
standardize images, customer care skills at the counter (service staff has high standards of
foreign languages, uniform height, friendliness, enthusiasm ...).

12
- Financial performance:

• In the first quarter of 2023, Vietnam Airlines' total consolidated sales and service provision
revenue reached VND 23,640 billion, up 149% over the same period in 2022 (VND 11,683
billion), of which air transport revenue reached VND 18,813 billion, up 223% over the same
period in 2022 (VND 8,403 billion). Also in the first quarter of 2023, the total revenue and other
income of parent company Vietnam Airlines will increase by 113% compared to the first quarter
of 2022 (an increase of more than VND 9,569 billion), mainly due to an increase in service
provision revenue of 116%, equivalent to an increase of VND 9,500 billion over the same period
last year, of which domestic revenue increased by 76.5%, International increased by 618.5%
due to a strong market recovery.

- Flight safety assessment:

• Compliance with safety procedures: Vietnam Airlines adheres to international aviation safety
procedures and standards to ensure the safety of passengers and crew.

13
 • Crew training and quality: Vietnam Airlines invests in professional training for cabin crew,
ensuring that they have the knowledge, skills and abilities to handle emergency situations and
ensure safety during flight.

• Maintenance and technical inspections: Vietnam Airlines follows maintenance procedures and
technical inspections to ensure their aircraft operate in a safe and reliable condition. Periodic
maintenance and safety checks are carried out in accordance with international standards.

• Compliance with flight safety regulations: Vietnam Airlines complies with regulations and rules
on flight safety set out by aviation regulatory authorities, including the International Aviation
Union (ICAO), the Civil Aviation Administration of Vietnam and others.

• Safety history: A review of Vietnam Airlines' safety history can provide information on the
number of safety incidents and measures the airline has taken to improve flight safety.

6. Environment and environmental protection issues (25, 26)

Consider aspects related to environmental protection and Vietnam Airlines' policies in this regard.

- On May 16, Vietnam Airlines said that the airline officially participated in the SkyTeam Global
Airline Alliance's "Sustainable Flight Challenge", with the first flight VN416 from Hanoi to Seoul
(South Korea) on May 14. "The Sustainable Flight Challenge" (TSFC) is a program aimed at
stimulating sustainable development initiatives in the aviation sector, initiated by Skyteam, a
global airline alliance with major airlines around the world.
- Vietnam Airlines said that in recent years, the airline's fleet has been continuously upgraded,
including Airbus A350, Boeing 787 and A321neo with new generation engines, helping to reduce
50% of emissions, 16% of fuel and 75% of noise compared to the old generation.
- Since 2019, Vietnam Airlines has reduced more than 60 million plastic bags per year by stopping
the use of plastic bags wrapped in many supplies and items on board.
- In the near future, the company will increase the replacement of many plastic culinary utensils
with more environmentally friendly materials.
- Notably, it is expected that from July 1, Vietnam Airlines will use new porcelain meal kits for
Business Class, to increase durability, reduce weight by 10% compared to the old porcelain set,

14
 contributing to reducing load and saving fuel for aircraft. It is estimated that this helps VNA
reduce fuel consumption by 12 tons per year.

7. Risk management (27)

- Aviation Operations Risk Management:

• Ensure flight safety: Apply international aviation safety procedures, policies and standards to
ensure the safety of passengers and crew.

• Operational Risk Management: Assesses and manages risks during air operations, including
technical problems, flight delays, flight cancellations, and weather effects.

• Emergency incident risk management: Train and prepare for emergencies such as technical
problems, accidents, or other contingencies.

- Financial risk management:

• Fuel price risk management: Monitor and manage fuel price fluctuations, using insurance tools
or futures contracts to minimize the impact of fuel price fluctuations on business operations.

• Exchange rate risk management: Monitor and manage risk from exchange rate fluctuations,
especially for international business activities.

• Total Financial Risk Management: Assesses and manages financial risk in areas such as assets,
liabilities, cash, and capital sources.

- Customer and market risk management:

• Market analysis and demand forecasting: Market research, customer segmentation and demand
forecasting to make appropriate business decisions and minimize risks from market fluctuations.

• Risk management from economic, political and social conditions: Monitor economic, political
and social factors that may affect the industry

8. Expansion and investment strategies (28)

15
- Route network expansion: 58

• Increase the number of domestic and international routes to expand the scope of Vietnam
Airlines' operations.

• The Hanoi - Da Nang - Ho Chi Minh City route is the most developed and is being expanded
to surrounding areas.

• Expand routes to new markets and increase flight frequency to existing destinations.

- Fleet investment:

16
 • Procurement and investment in new fleets, including modern and fuel-efficient aircraft to
improve operational efficiency and reduce costs.

• As of March 2022, VNA has a total of 94 aircraft with an average age of 8 years. In addition to
passenger services, the airline also operates an air freight division, transporting cargo in Asia,
Europe, North America and Oceania, using its own passenger aircraft and those of its partners

- Evaluating aircraft types in line with Vietnam Airlines' development strategy, including narrow
and wide-body aircraft to meet the needs of passenger and cargo transportation:

• Vietnam Airlines continuously improves and upgrades its existing fleet to enhance performance
and customer experience.

- Service and product development:

17
 • Invest in service and customer experience improvements, including utility and quality.

• Expand diversified airline services such as business class services, cargo and passenger services,
baggage drop services and other value-added services.

• Innovate technology and improve ticketing and customer management systems to optimize
transaction processes and interactions with customers.

- Look for opportunities for cooperation and links:

• Opportunities to partner with other airlines, including codeshares and partner links, to expand
route networks and expanded customer service capabilities. Growing within Sky Team - As the
world's 2nd largest global airline alliance, SkyTeam offers its passengers consistent service
from its member airlines with a greater choice of destinations and frequencies around the globe.
With SkyPriority from SkyTeam, passengers are given priority access to ground service at
SkyTeam's 21 airports when connecting flights and only need to check in once with Sky
Transfer.

18
19
III. ENVIRONMENTAL ANALYSIS
1. Demographic trends (22, 03, 01)

Demography is the study of a population based on factors such as location, occupation, age, race,
and gender. Vietnam Airlines targets potential partners and customers of all ages wishing to use
aircraft.

Vietnam Airlines' main target customers are 35-45 years old, regardless of gender, occupation,
medium to high average income.

In addition, Vietnam Airlines has a secondary target group focusing on the age group from 18 to
26, regardless of gender, earning income through the LotuStudents program.

Up to now, Vietnam Airlines has not restricted the age of customers. From 2019, individuals from
2 years old and above can register and become Lotusmiles members (Vietnam Airlines
membership card). Therefore, young customers will have the opportunity to buy tickets at a
discounted price. Vietnam Airlines is gradually improving its shortcomings and gradually
asserting its position on journeys.

20
➔ Based on the above research and the population pyramid, it can be seen that the number of people
between the ages of 16 and 45 accounts for the majority, indicating that this is a large market and
this is becoming a great potential opportunity for Vietnam Airlines to develop in the future.
2. Socio-cultural influences (No impact)
3. Technological developments (02, 04)

The peculiarity of the air transport industry is the speed of application of new and advanced
technology because this is a specific type of business, requiring high operational safety, if
negligence will lead to accidents. Vietnam Airlines is always upgraded according to new aviation
technology, mainly using technology of famous aircraft manufacturers such as AIRBUS,
BOEING,... Incorporating improvements in structure, fuselage, engines, and control systems to
improve the aircraft's operational efficiency and range.

- Online booking:

Vietnam Airlines uses an advanced ticketing and booking system that allows customers to book
flights, manage bookings and purchase tickets online. These systems provide a seamless and
convenient booking process for passengers.

- FPT continues to be a partner providing 4.0 technology solutions for Vietnam Airlines:

FPT Corporation and Vietnam Airlines signed a strategic cooperation agreement for the period of
3 2020-2023 to take advantage of each side's strengths to jointly develop technology.

FPT and Vietnam Airlines continue to inherit, develop and focus on 3 main areas: Technology
Solutions, Telecommunications Infrastructure and Passenger Transportation. The two sides will
jointly research and invest in the development of products and services on the basis of sharing
investment funds, revenue, costs and copyrights for information technology products and services.

- CMS provides IT services for Vietnam Airlines:

On 05/12/2018 in Hanoi, CMS officially became a provider of IT services, maintenance, periodic

inspection of IT equipment for Vietnam Airlines Corporation (Vietnam Airlines).

21
 The operation and exploitation of the IT system of Vietnam Airlines Corporation will greatly
determine the safety and lives of millions of road users.

The entire system of up to nearly 1000 devices (including hardware and software) of Vietnam
Airlines located at 3 airports Noi Bai, Da Nang, Tan Son Nhat is transferred to CMS for periodic
maintenance and maintenance. Check and diagnose possible errors, avoid unexpected problems
during operation.

 Therefore, Vietnam Airlines is forced to carefully consider in choosing partners to provide IT

services on many aspects. Appreciating the implementation capacity of CMS, Vietnam Airlines
has trusted and decided to "shake hands" with CMS to strengthen and promote the Information
Technology platform for the internal system.
- Digital entertainment technology on board Vietnam Airlines:

In November 2018, the airline put into operation Airbus A321neo aircraft especially for domestic
and international short-haul routes. Without downloading the application, visitors using the
browser can connect personal electronic devices (smartphone, ipad, laptop,...) to the aircraft's
entertainment store to watch movies and music.

➔ This is one of the important factors determining the quality, economic efficiency as well as
competitive advantages of air transport products. With the technology quality studied above, it can
be seen that Vietnam Airlines has generated a lot of profit for the company, creating the most
comfortable service quality for customers.
4. Macroeconomic impacts (05, 06, 07)

Vietnam's overall economic growth and stability directly affect the demand for air travel.

- GDP:

• The economy recovering from Covid helps GDP in 2022 is estimated to increase by 8.02%, the
highest level in 2011-2022. The General Statistics Office said that GDP in the fourth quarter
was estimated to increase by 5.92% over the same period last year. GDP in 2022 increased by
8.02%. This is also the highest level in 2011-2022.

22
 • GDP per capita in 2022 at current prices is estimated at 95.6 million VND/person, equivalent
to 4,110 USD, an increase of 393 USD compared to 2021.

 GDP signifies that Vietnam's strong economy can lead to an increase in business trips and tourism,
positively impacting Vietnam Airlines' operations.
- Exchange rate:

In 2022, there was a time of 7-8% depreciation compared to the end of 2021 but by the last trading
day of 2022, VND only depreciated by 3.53%, half of what it was two months ago. Meanwhile,
the price of USD freely plunged sharply.

23
 Exchange rate fluctuations affect imports of more expensive parts or fuel. It also affects the
demand for customers to travel by air.
- Inflation:

The 2022 Consumer Price Index (CPI) year-on-year trend has been on a continuous upward trend
over the months, with only a slowdown in the growth rate in February and August, of 1.42% and
2.86%, respectively. Immediately after that, the months of March and September saw the CPI
increase compared to the same year 2021 at a rate of 1.5 times.

24
 Inflation affects fuel prices, labor costs and maintenance costs. The airline may need to manage
these increased costs by adjusting fares or taking cost-cutting measures.
➔ Vietnam Airlines must monitor and adapt to macroeconomic impacts to maintain competitiveness,
maintain financial stability and contribute to sustainable development in the aviation industry.
5. Political-legal pressures (08)

The political system of a country has a decisive influence on the country's internal and external
trends. The history of world development has witnessed many political conflicts between different
countries. Often associated with political conflict are diplomatic and economic conflicts. And
business enterprises are always influenced by the policy institutions of the host country as well as
the importing or investing country.

Vietnam has the most stable political system ever. Since its establishment, Vietnam Airlines has
been under the management of state management agencies at all levels in accordance with the law.
Especially, during the raging COVID-19 epidemic, the Party has had policies to help and support
the air transport industry, including Vietnam Airlines.

In addition, Vietnam Airlines must comply with the provisions of law and relevant legal documents.
The Company's operating license must ensure continued compliance with all laws and regulations,
including any additional rules and regulations that may be issued in the future.

25
 And in the context of the COVID-19 epidemic, Vietnam Airlines is making efforts to minimize
risks, limit negative impacts, and update and refer to activities related to the law.

➔ The political and legal landscape can influence the aviation industry through government
regulations, policies, and initiatives. These factors can affect an airline's costs, operational
processes, and market access. Analysis of such pressures will provide insight into the potential
risks and opportunities associated with the regulatory environment.
6. Global trade issues (No impact)

26
IV. SWOT ANALYSIS

SWOT analysis (or SWOT matrix) is a strategic technique used to help individuals or
organizations identify strengths, weaknesses, opportunities and challenges in the competitive
marketplace as well as in the process of developing content plans for projects. Identifying a SWOT
model is extremely important. As it will determine what the next step to achieve the goal is. The
leader should rely on the SWOT matrix to see if the goal is feasible or not. If not, then they need
to change their goals and redo the SWOT matrix evaluation process.

Vietnam Airlines' SWOT analysis is given below:

I. STRENGTHS
1. Geographical location of Vietnam at the gateway of the regions:

Our country is located at the gateway to Southeast Asia, where economies exchange. With the
advantage of being adjacent to 4 mainland countries and bordering the sea, our country has become
a place of economic exchange of countries inside and outside the region, a gateway to other regions.

2. Vietnam Airlines is 1 of the most famous brands in Vietnam: (46, 09, 10, 11, 12)

At the end of 2021, international data research and analytics company YouGov announced the top
10 Best Brands in Vietnam. The ranking has just been published by YouGov - a global research
firm based in the UK - on 16/11/2021. The ranking is based on data from 54 markets around the
world and a survey of more than 17 million people conducted between October 2020 and
September 2021 on aspects of the brand including overall quality, value, impression, business
reputation, satisfaction and willingness to recommend the brand to others.

27
Vietnam Airlines is the only representative of the travel sector in the top 10 ranking thanks to its
outstanding efforts in adapting to the Covid-19 epidemic.

Following the success of the prestigious World MICE Awards 2020 and 2021, in 2022 VNA
continues to be nominated and honored as "Best MICE Airline in Asia 2022".

Accordingly, in the context of complicated epidemic developments, Vietnam Airlines has quickly
tightened and enhanced epidemic prevention measures to bring a safe experience to passengers.
The Airline's epidemic prevention standards are rated 4 stars by Skytrax aviation rating
organization and AirlineRatings website absolutely rated 7/7 In addition to focusing on products
and services, Vietnam Airlines also actively participates in social works for epidemic prevention
such as supporting the transport of frontline forces to fight the epidemic; transportation of supplies,
medical equipment and essential items; bringing people stranded in domestic and foreign epidemic
areas back to their localities...

28
 As a result, Vietnam Airlines not only affirms the role and responsibility of the National Airline
but also receives the support and love of a large number of customers and the public. This is also
an important factor to help the Company maintain its position as one of the most loved brands in
Vietnam in 2021.

3. Leading among domestic airlines in terms of market share on routes including domestic and
international flights.

Vietnam Airlines' route network covers 21 provinces and cities across the country. Internationally,
the airline has opened routes to Asia, Europe, Australia and the Americas, with a total of 28
destinations in 26 countries and territories.

29
 - Domestic routes: Flights to Hanoi, Hai Phong, Thanh Hoa, Dien Bien, Da Nang, Hue, Vinh, Dong
Hoi, Pleiku, Tuy Hoa, Ho Chi Minh, Nha Trang, Da Lat, Phu Quoc, Chu Lai, Quy Nhon, Can
Tho, Con Dao, Buon Ma Thuot, Rach Gia, Ca Mau.

- International routes: Routes to Singapore, Bangkok, Phnom Penh, Manila, Jakarta, Luang
Prabang (Laos), Yangon,Vientiane, Tokyo, Seoul, New York, Houston, Chicago, Honolulu,
Moscow, Amsterdam, etc.
4. Innovative Marketing Strategy. (47)

Despite going through a difficult period when severely affected by the Covid-19 pandemic and
"rejuvenating" the brand image is one of them.

This "rejuvenation" is marked by the "handshake" of SpaceSpeakers Group to develop its activities
and promote its culture and image, reaching more to the young community in Vietnam as well as
around the world.

30
 At the same time, Vietnam Airlines gradually becomes closer to young people when continuously
making trend-catching content, using youthful, optimized and creative images in many different
formats to highlight brand elements. MV "Hurry up!" with contributions from young vocalists.

5. With great support from the Government. (48)

Atthe Government Headquarters, Prime Minister Pham Minh Chinh witnessed the signing
ceremony of an agreement to support aircraft leasing costs between Vietnam Airlines (VNA) and
its largest aircraft leasing partner, Air Lease Corporation (ALC-USA), helping VNA reduce more
than 1 billion USD of costs and payment obligations.

31
6. Large financial scale. (32)

Invest in new fleets and additional manpower.

Regularly fostering and training human resources.

32
II. WEAKNESS
1. The fleet size is still lagging behind its main regional rivals Singapore Airlines (SQ), Thai
Airways (TG), Malaysia Airlines (MH). (49, 50)

Singapore Airlines has been honored 4 times to be voted "World's Best Airline" (the last time 2018)
– according to Skytrax. In 2019, only ranked 2nd, Qatar Airways overtook SQ to take the top
position. Suffice it to see the gap between Singapore Airlines and Vietnam Airlines.

On Skytrax's World Airlines Awards 2018, Vietnam Airlines is ranked 50th while Thai Airways
is 10th. Vietnam's airline is up to 40 places behind Thai Airways. When comparing each category
surveyed by Skytrax, it can be seen that Vietnam Airlines scored lower than Thai Airways in many
categories.

2. Low on-time flight rates. (52)

The Civil Aviation Administration of Vietnam has just released data on on-time, delayed and
canceled flights of Vietnamese airlines in 2022. Notably, Vietnam Airlines is the airline with the
highest rate of delays and cancellations.

"Delay Airlines", "Sorry Airlines" Lare nicknames associated with the airline.

33
3. Mediaaccidents affect brand image. (51)

4. Its destinations in other countries around the world have many complicated fluctuations in
the economic-political situation. (13)

The Civil Aviation Administration said that before the Russia-Ukraine war, Vietnam Airlines
operated routes to and from Russia, Europe and the US.

By banning airlines from operating routes over Russia, Vietnam Airlines' operations have been
greatly affected.

Specifically, for flights between Vietnam and Europe, the UnitedStates has to change its route to
avoid Russia through China, Kazakhstan or through North Africa.

III. OPPORTUNITY

1. Domestic politics are stable and safe.

According to foreign experts, political stability has become an advantage throughout Vietnam's
development process, an advantage that not all countries have. This is an opportunity to pay
attention to when analyzing Vietnam Airlines' SWOT model.

34
2. GDP increased. (14)

Accordingly, Vietnam's GDP in 2023 will reach about 435.59 billion USD with ADB's growth
forecast of 6.5% (GDP in 2022 will reach 409 billion USD according to data from the General
Statistics Office).

3. The number of tourists in the world coming to Vietnam is increasing.

In January 2023, the number of international visitors to Vietnam will reach more than 871,000, up
23.2% compared to December 2022 and 44.2 times higher than the same period in 2022.

35
4. Opportunities to partner with SkyTeam members and other airlines. (28)

Joining SkyTeam on 10/6/2010, after more than 10 years of being a member of SkyTeam, Vietnam
Airlines has undergone an impressive change in service quality through the implementation of
alliance projects as well as self-upgrading to meet common standards, resulting in a continuous
improvement in the customer experience. With these efforts, VNA was recognized as a 4-star
airline by SkyTrax for 4 consecutive years in the period 2016 – 2019.

On the other hand, through codeshare partnerships with 13 of SkyTeam's 19 member airlines,
Vietnam National Airlines' network has been expanded to 61 routes and 46 destinations.

IV. THREATS
1. Surrounded by full-service airlines and traditional airlines.

In Vietnam market, there are currently 6 airlines: Vietnam Airlines, Pacific Airlines, Vasco, Vietjet
Air, Bamboo Airways and Vietravel Airlines. Therefore, the competitiveness in terms of fares,
routes, and operating frequency among airlines is very high.

36
 The rise of low-cost airlines and the emergence of new airlines make it difficult for traditional
airlines such as Vietnam Airlines. Vietnam Airlines has continuously petitioned the Government
for personnel issues, especially the loss of pilots. Many Vietnam Airlines pilots have resigned and
joined other airlines because they believe that they are receiving too low salaries compared to other
airlines in Vietnam.

2. Macroeconomic risks still exist.

High inflation, depreciating local currency, unstable interest rates. Vietnam's economic growth
greatly affects Vietnam's aviation market, especially the domestic and outbound aviation market.

Therefore, the global and domestic economic slowdown has been and will continue to affect the
transportation and travel demand of customers. Rising unemployment and falling GDP will cause
passenger numbers to decrease and customers to be more price sensitive and tend to switch to low-
cost airlines.

The low average income of Vietnamese people leads to limited spending on air transport. Currently,
consumers are also very price sensitive, directly affecting the company's plans to improve average
revenue.

Oil prices in the world are unstable and tend to rise, which makes it difficult for Vietnam Airlines
to accurately plan to estimate profits.

3. The competitiveness with international airlines is not high.

- Stiff competition: Vietnam Airlines operates in a highly competitive industry. It faces competition
from both domestic and international airlines, which can affect its market share, price and
profitability.losing market share as other businesses join such as Mekong Air, Trai Nguyen,
VietJet Air Asia, Indochina Airlines ...
- Fuel Price Fluctuations: Fuel prices are a significant cost factor for airlines. Fluctuations in fuel
prices can significantly affect Vietnam Airlines' operating costs and profitability.
- Employees lack the right education for the job
- Staff also lack agility, neatness, even overbearing, disrespectful to guests.

37
- There is still the status of "buying" the next position related to the grandchildren and fathers used
mostly by incompetent people
- There is still a situation where pilots make fake licenses.
- Technological disruption: Advances in technology can disrupt aviation. For example, the rise of
online travel agents, sharing economy platforms, and changing customer preferences for digital
channels may pose challenges for traditional airlines such as Vietnam Airlines.
- Health and pandemic risks: Outbreaks of infectious diseases, such as the COVID-19 pandemic,
can severely affect the aviation industry. Travel restrictions, reduced passenger demand and
strengthening health and safety regulations may pose significant challenges to Vietnam Airlines'
operations and financial performance.
- These threats require Vietnam Airlines to be proactive in managing risks, adapting to changing
market conditions, maintaining financial stability, investing in technology and implementing
effective crisis management strategies. By addressing these threats, Vietnam Airlines can strive
to maintain its long-term competitiveness and sustainability.

38
V. FIVE COMPETITIVE FORCES

Although Vietnam's aviation industry as well as the world aviation industry has not overcome the
global financial crisis in the past three years, due to the needs of a developing country, Vietnam's
domestic aviation industry has developed at a rapid pace. According to statistics of the Civil
Aviation Administration of Vietnam, in 2022, a total of 313,223 flights took off, reaching 95%
compared to the number carried out in 2019 (326,680 flights), up 148% over the same period in
2021. The volume of air cargo transported in 2022 is estimated at 1.25 million tons. This is 95%
of 2021 and 2019 equivalent). As for passenger services, in 2022, the air transport market reached
about 55 million passengers, up 3.7 times compared to 2021 and equal to 69.6% compared to 2019.
In which, domestic passenger transport reached about 43.2 million passengers (up 3.5 times
compared to 2021 and up 15.6% compared to 2019) and international passenger transport reached
11 million passengers (up 22 times compared to 2021 and equal to 27% compared to 2019).

The aviation industry is very competitive and Michael Porter's five-force model, which is a
business unit strategy tool used to analyze the value of the industry structure, can be used to analyze
the competitive intensity and profitability of this industry.

1. Threat of Entry

The threat of new entrants refers to the possibility of new competitors entering the industry and
raising the level of competition, thereby reducing its attractiveness. It seems that the threat of entry
in the aviation industry is weak because the pool of entry-level candidates is small and industry
members will strongly oppose the efforts of new entrants to gain a foothold in the market. However,
there are a number of hurdles that new entrants encounter and must overcome, including:

- High capital requirements.

The aviation industry is one of the most expensive, due to the cost of purchasing and leasing
aircraft, safety and security measures, customer service, and manpower. Only a few large
corporations are capable of becoming competitors to join the industry for Vietnam Airlines such
as Vingroup, Truong Hai THACO, SaiGonTourist, etc.

- Restrictive management policy.

39
 • Conditions for granting air transport business licenses.

To set up an airline, you have to go through the following steps:

Step 1: Apply for investment policies from the Prime Minister.

Step 2: Apply for an enterprise registration certificate.

Step 3: Apply for an air transport business license.

An enterprise granted an air transport business license shall have the following obligations:

▪ Disclosure of contents of air transport business license.

▪ Operate in accordance with the purposes, contents and conditions stated in the air transport
business license.
▪ Maintain conditions for issuance of air transport business licenses and aircraft operator
certificates according to regulations.
▪ Maintain the quality of air transport services in accordance with regulations of the Ministry of
Transport.
▪ Comply with the provisions of the law on civil aviation and other relevant laws.

• The level of legal capital for the business of aviation services.

The minimum capital for establishing an airline and maintaining an air transport business is
specified in Clauses 1 and 2, Article 8 of Decree No. 92/2016/ND-CP as follows: "Article 8.
Capital conditions

1. The minimum capital level for establishing and maintaining an air transport business enterprise:

a) Operating up to 10 aircraft: VND 700 billion for enterprises operating international air transport;
VND 300 billion for enterprises only operating domestic air transport;

b) Operating from 11 to 30 aircraft: VND 1,000 billion, for enterprises operating international air
transport; VND 600 billion for enterprises only operating domestic air transport;

40
 c) Operating more than 30 aircraft: VND 1,300 billion, for enterprises operating international air
transport; 700 billion Vietnamese dong for enterprises only operating domestic air transport.

2. Minimum capital for establishment and maintenance of general aviation business enterprises:
VND 100 billion."

This legal capital is so high that it makes it impossible for businesses to operate private airlines in
Vietnam.

- Brand value.

Another obstacle for new entrants is brand value. Brand identity is important in the aviation
industry and benefits major airlines. Major carriers allocate significant resources to marketing
efforts. Frequent flyer programs and other incentives have been successful in enticing travelers to
fly with certain airlines. This offer can often be strong enough to make customers choose one
carrier over another even if another carrier offers lower fares.

- Hub system.

Barriers to entry are also raised by the central system. Carriers can give travelers more options
while tying less capital through their hubs. As a result, the hub system creates market power for
major carriers.

 The financial and policy pressures the Government place on newcomers to the domestic
aviation industry are so heavy that it is difficult for them to jump in.

2. Threat of substitutes

The availability and threat of substitutes refers to the ability of companies in one industry to come
under competitive pressure from the actions of companies in a closely adjacent industry whenever
buyers view products of two industries as good substitutes. The alternative to air travel includes
traveling by train, bus, or car to the desired destination. The magnitude of this threat depends on
various factors such as money, convenience, time, and personal preferences of travelers. The
competition from substitutes is influenced by the ease with which the buyer can change to an
alternative product consisting of three factors:

41
- Availability and attractive price of alternative vehicles.

Compared to other means of transport, the price of air tickets is much higher. However, this
distance will get smaller and smaller on the long route from north to south. In the past 5 years, the
number of accidents in the aviation industry has increased significantly, causing frequent
passengers to fly extremely confused.

However, if compared to the number of successful flights that airlines around the world carry out
every day, this is only a very small percentage, not enough to make customers feel distrustful of
this means of transportation. Therefore, the competitive factor of alternative products is not a
concern for VNA.

- Compare Alternative (quality, performance and other related attributes).

With a travel speed of up to 800 km/h, thousands of meters above the ground, aircraft are the
fastest means of transportation. And the special thing is that this is the safest vehicle of all time.
Because from the seats, the air in the cabin, to the route and altitude of the aircraft, to the crew,...
are calculated based on careful consideration of safety. However, in the domestic market,
especially on short-haul routes, the competitive advantage becomes more limited as there is time
required for passengers both on the plane and traveling to the airport and vice versa while airports
are located far from the city center.

Currently, many people consider when choosing an aircraft as the main means of business trips.
Because if compared to road or rail vehicles, air vehicles have advantages such as saving time,
planes have direct flights to some places without having to change means of transportation like
Phu Quoc,..

- Conversion costs.

Due to their low-fare direct flights, Jetstar Pacific and Vietjet Air are able to attract both price-
sensitive and conveniently oriented travelers away from these alternatives. But VNA is a 4-star
airline, offering a full range of services to customers such as the Golden Lotus Plus Program can
be considered as a commitment of customers to airlines, in which frequent flyers can benefit from
miles flown with these airlines including free tickets, privileged service and considerable

42
 convenience. As long as passengers participate in these programs, their switching costs will be
higher.

➔ Due to the majority of Vietnamese people having budget income, low conversion costs and
airport location far from the city center, in domestic tourism, airlines are left behind other
means of transportation because of prices and inconvenience.

3. Intensity of Rivalry

Competitive competition describes the intensity of competition between companies in an industry.

Since airlines are engaged in a constant struggle to take away market share from each other,
industry growth is average, and since it is easy for buyers to switch between airline companies,
depending on price, competition is increased.

Vietnam Airlines' industry competitors include Vietjet Air, Jetstar Pacific, Bamboo Airways,
Vietravel Airlines.

- Vietjet Aviation Joint Stock Company:

• It is Vietnam's first private airline. Not only air transportation, Vietjet also provides consumer
needs of goods and services through e-commerce technology applications. Vietjet is an official
member of the International Air Transport Association (IATA) with Operational Safety
Certification (IOSA).

• Vietjet is rated aviation safety at the highest level in the world with 7 stars by
(AirlineRatings.com) (all airlines in Vietnam are rated at 7/7 stars, of which Vietjet's products
are only rated 2/5 stars and other airlines in Vietnam are close to 6/7 stars), A reputable
organization specializing in evaluating the safety and products of global airlines. Previously,
AirlineRating also awarded Vietjet with the award "Best Low Cost Airline 2018 – 2019".
According to Airfinance Journal, Vietjet is among the top 50 global airlines in terms of
operations and financial health in 2018.

• Currently, VietJet Air offers many domestic and international routes with about 385 flights
made every day. Including a total of 17 domestic routes, 30 routes to China and international

43
 routes to other famous tourist destinations of Asia such as Thailand, Macau, Hong Kong,
Taiwan,...

- Bamboo Airways Joint Stock Company:

• Operating under the trade names Bamboo Airways or Tre Viet Airlines, is a Vietnamese airline
belonging to FLC Group, headquartered in Hanoi and registered in Binh Dinh.

• The company had an initial charter capital of VND 700 billion, then its charter capital was
increased by parent group FLC Group to VND 7000 billion in May 2020 and VND 10,500
billion in February 2021. Bamboo Airways serves domestic routes connecting with FLC's
resorts as well as international routes.

- Vietravel Airlines:

• Often known and operating under the trade name Vietravel Airlines, is a Vietnamese airline
under Vietravel. It is the first airline headquartered in Phu Bai Airport, Hue. The Prime Minister
of Vietnam approved the investment policy of Vietravel Airlines on April 3, 2020 and started
operating commercial flights from January 25, 2021.

• In the beginning, Vietravel Airlines plans to operate more than 40 flights per week, focusing on
Ho Chi Minh City - Hanoi route and tourist destinations such as Nha Trang and Phu Quoc.

• The airline's goal is to quickly complete Vietnam's domestic flight network. Next will be
international routes in Northeast Asia, providing air transport services and domestic and
international travel packages, contributing to improving air transport capacity and developing
the travel industry, strengthening interdisciplinary tourism connectivity, interregional.

• The first international market that Vietravel Airlines targets is ASEAN countries, namely
Bangkok - Thailand, then Vietravel markets with advantages such as the Middle East, Northeast
Asia, etc. The airline also flies charters to serve travelers.

The competition is also high in the aviation industry due to high fixed costs. Since the majority of
the cost of a flight is fixed, there is a huge opportunity for airlines selling unsold seats cheaply to

44
 cover the cost as much as possible, which settles in price wars between airlines. Airlines are
constantly competing with each other on price, technology, in-flight entertainment, customer
service, and many other areas.

➔ With different strategies (full service vs. low cost), the competitive force of Vietnam's
domestic aviation industry is very strong, requiring airlines to have a strong competitive
advantage to win the game.
4. Bargaining Power of Suppliers

Factors related to suppliers' bargaining power include the threat of transitional integration and the
concentration of suppliers in the industry. Suppliers to the aviation industry vary, from aircraft
manufacturers, fuel corporations, flight academies that provide pilots, flight attendants, etc. to a
catering company. In general, the bargaining power of suppliers in the aviation industry is strong
for the following reasons. First, Vietnam's aviation industry is dominated by Boeing and Airbus.
Vietnam Airlines owns the most aircraft with 104 aircraft. Vietnam Airlines' fleet structure also
includes the most advanced aircraft, including wide-body aircraft including Boeing 787-9, Boeing
787-10 and Airbus A350; The narrow-body family has the A321neo. Supplier centralization is
undermining airlines' ability to control suppliers. It seems that Vietnam's aviation industry cannot
be integrated back into aircraft manufacturers to produce their own. Second, In air transport, the
business cost structure focuses on the main components including: fuel costs, compulsory
maintenance costs for the fleet, labor costs, depreciation costs and aviation service costs... As for
fuel costs, this is the type of cost that accounts for the largest proportion of costs. With Vietnam
Airlines Corporation (Code: HVN), the airline spent about VND 39,045 billion on aviation fuel in
2018, accounting for 42.5% of the total cost and directly affecting the price of each air ticket. High
fuel prices force airlines to cut current spending by 10-20% on all items, use fuel-efficient aircraft,
and operate flexible schedules.

Supplier power for Vietnam Airlines is below average because Vietnam Airlines is a national
airline, with strong potential and priority. Some suppliers who are members of Vietnam Airlines
stand out such as:

Freight Forwarding Company Limited (VINAKO)

45
 Noi Bai Commodity Services Joint Stock Company (NCTS)

Tan Son Nhat Commodity Service Company Limited (TCS)

Vietnam Aviation Meal Company Limited (VACS)

Sabre Vietnam Joint Stock Company

Noi Bai Aviation Meal Joint Stock Company (NCS)

etc.

➔ The valuable and important characteristics in the product supplied as well as the danger to
specific inputs (aircraft and fuel) enhance the bargaining power of suppliers compared to
Vietnam's aviation industry.

5. Bargaining Power of Buyers

The strength of buyers is determined by switching costs, relative purchase volumes, product
standardization, elasticity of demand, brand recognition, and quality of service. Due to the
Internet, price information is less fragmented and easier to compare. Usually, a traveler can find
a price difference for the exact same flight. Air travel isn't cheap, and can be the most expensive
part of a family vacation. Therefore, for some buyers, who are price-sensitive and looking for the
best deals available, demand is very elastic. However, in Vietnam's aviation industry, the
bargaining power of buyers is not too strong. There are limited options for choosing a low-cost
airline with a relatively quality standard. They can choose Jetstar (recently merged with VNA)
or Vietjet which has a poor reputation when receiving negative feedback from customers. In other
words, the difference of customer selection is narrow. In terms of long-haul routes purchased
infrequently, there are very few foreign airlines operating international routes from Vietnam due
to the monopoly of CTCPP.

➔ Limitations in options especially for long-haul, infrequent purchases and monopolies in the
supply of core products have reduced buyers' bargaining power in the aviation market.

46
VI. CONCLUSION.

In the aviation industry, as in other industries, the main success factors can be identified by
analysis and inference from industry characteristics, competitive forces, motivations, market
positions, and the next move of competitors.

First of all, in today's economy, people are becoming more and more sensitive to prices. On the
other hand, as mentioned above, aviation is currently the most expensive means of transportation
compared to other alternatives such as trains, buses, and cars. Therefore, the aviation industry
must provide services that are worth the money customers pay. Besides, service or quality of
service can also help airlines differentiate themselves from other airlines. Young fleet of nearly
100 modern aircraft such as Boeing 777, Airbus A330, Airbus A321/320, online booking and
check-in system, European, Chinese, Japanese meals, luxury seats for Business Class ... are all
types of in-flight services that help Vietnam Airlines (VNA) compete successfully. From that
moment on, the corporation can create a professional and reliable brand or reputation, which is
an important consideration of customers when choosing between carriers.

In Vietnam's aviation industry, despite the emergence of many new airlines such as Vietnam Air
Service Company (VASCO), VietJet, Bamboo Airways, Vietnam Airlines (VNA) still seems to
monopolize the market. There are many reasons for this. One of these reasons is that all new
carriers are private and small-scale, so their capital capabilities do not allow them to develop a
wide route system. Meanwhile, JSC is the only airline sponsored by the Government. Therefore,
they have both opportunities and favorable conditions to exploit not only domestic but also
international destinations. VNA has established itself as the leader of Vietnam's aviation industry
with 84 domestic routes and 27 international routes with more than 300 flights per day (official
website of GHI). That is absolutely VNA's competitive advantage compared to other carriers.
Developing hub systems will be key for VNA to attract and retain customers.

As previously analyzed, although competitive pressures from potential new entrances are weak,
VNA cannot shed light on them. They are private and small-scale, they lag behind VNA in terms
of central systems, service quality and long-haul flights. Therefore, they try to focus on short
flights with low prices and many promotions. That is why, besides the quality of service, a
shortcoming in promotion can fall into unfavorable competition. In addition, Vietnam's aviation

47
industry is in the early stages of development of the life cycle (mentioned above) where market
share or market position is prioritized. Therefore, promotion is considered an important success
factor.

In summary, service quality, focal point system and promotion are three key factors for the future
competitive success of Vietnam's aviation industry.

For the purpose of deciding whether the prospects of the aviation industry offer the company a
sufficiently attractive business opportunity, several important factors must be considered such as:
the development potential of the industry, the strength of the five competitive forces, the level of
risk and uncertainty in the future, sufficient competitive strength, etc. We believe that the
following analysis can bring the overall outlook for Vietnam's aviation industry in general and
Vietnam Airlines Corporation in particular.

First of all, considering the growth potential of Vietnam's aviation industry, it can be said that
overall, the industry will have favorable conditions to develop and bloom in the future. As stated
in the economic characteristics of the industry "The aviation market has experienced significant
growth after the implementation of the renovation policy to open up the economy in 1986",
Vietnam's aviation industry has been developing rapidly in recent years. Some good signs for the
industry as a whole during these years may include: population growth from an average of 87.84
million people in 2011 to 99.2 million people as of 00:00 on April 1, 2022. leading to a more
expansive market; the prospects of Vietnam's economy on a stable path thanks to falling inflation
and a better trade balance as ranked by Fitch-Global Rating Agency; GDP growth was positive
during the difficult period of the whole economy (5.89% in 2011), demonstrating stable demand
from the market. In addition, taking advantage of the positive development of both domestic and
foreign tourism industry, Vietnam's aviation industry is promised to increase profits from visitors
– both from and from Vietnam.

Along with the overall growth potential of the aviation industry is the prospect of cooperation
between Vietnamese airlines in the coming period. Obviously, after analyzing the economic
characteristics of the aviation industry as well as five competitive forces, it can be concluded that
the aviation industry is absolutely attractive for Vietnamese aviation, in that it is protected by the
government, it has no direct competitors, it is extremely strong compared to buyers, suppliers and

48
competitors and it is playing in a very potential area for growth. Vietnam Airlines at the moment
is a solid leader in the Vietnamese aviation industry that can bring full opportunities for good
profits. That's why it's investing heavily to seize the opportunities it sees and improve its long-
term position in the business. In addition, there are some signs that the aviation industry is getting
stronger. After a series of bankruptcies in Indochina Airlines, Air Mekong, Trai Thien Airlines,
and people only see the remaining Vietnamese airlines and Jetstar Pacific, Vietjet air, Bamboo in
the industry. And Jetstar Pacific was eventually acquired by Vietnam Airlines. In addition,
according to information on Vietnamplus.vn website, the Prime Minister signed Decision No.
123/TB-VPCP in 2009 requesting Vietnam Airlines Corporation (Vietnam airlines) to coordinate
with relevant agencies to develop a long-term orientation in the overall development of Vietnam's
aviation industry. In particular, new approaches at the national level to international standards are
seen as the key to building an aviation industry commensurate with the international stature,
making solid strides to integrate into the global aviation industry as a truly selected regional airline,
deeply rooted in traditional Vietnamese culture. From the above growth potentials, there is
generally a very attractive profitability from Vietnam's aviation industry in the coming years.

Last but not least. The problem of Vietnamese airlines at this time is capacity limitations,
negatively affecting customers. Apparently, overcrowding on special days has led to higher prices,
making passengers unhappy and, as a result, debates about many new entrants heating up.
Obviously, buying more aircraft and doing business for the benefit of passengers are good ideas
for the more stable development of Vietnamese airlines.

In short, Vietnam's aviation industry has great potential for development and is quite attractive in
terms of profits in general. After analyzing five competitive forces and strategic group maps,
Vietnamese airlines proved to be the dominant players in the industry. It possesses critical success
factors that can secure a long-term position in the business. In addition, Vietnam Airlines
Corporation is making efforts to grow stronger not only in Vietnam but also in neighboring regions
to match the international stature. Hopefully, Vietnamese airlines in particular and the aviation
industry in general can make great strides in the process of development and globalization.

49
VII. REFERENCE.
1. https://thanhnien.vn/thoi-toi-can-khong-kip-gen-z-buoc-chan-ra-duong-la-gap-khuyen-mai-
185230309141620505.htm (01)
2. https://fpt.com.vn/vi/tin-tuc/tin-fpt/fpt-tiep-tuc-la-doi-tac-cung-cap-giai-phap-cong-nghe-4-0-
cho-vietnam-airlines (02)
3. https://www.vietnamairlines.com/vi/sites/lotus-student (03)
4. https://cms.com.vn/tin-tuc-cms/cmc-pt-tu-hao-la-doi-tac-cung-cap-dich-vu-it-cho-vietnam-
airlines.html (04)
5. https://vietnamgroove.com.vn/gdp-binh-quan-dau-nguoi-nam-2022-tang-truong-cao-nhat-12-
nam-qua/ (05)
6. https://kinhtedothi.vn/ty-gia-2022-giam-dan-ve-cuoi-nam.html (06)
7. https://tapchicongthuong.vn/bai-viet/thuc-trang-lam-phat-nam-2022-va-giai-phap-dat-muc-tieu-
quoc-hoi-de-ra-nam-2023-103178.htm (07)
8. https://dangcongsan.vn/phong-chong-dich-covid-19/khung-hoang-nganh-hang-khong-trong-con-
bao-dich-584195.html (08)
9. https://caa.gov.vn/doanh-nghiep/vietnam-airlines-la-hang-hang-khong-mice-tot-nhat-chau-a-
2022-nam-thu-3-lien-tiep-20221103160444770.htm (09)
10. https://skytraxratings.com/airlines/vietnam-airlines-rating (10)
11. https://www.airlineratings.com/ratings/vietnam-airlines/ (11)
12. https://baochinhphu.vn/vietnam-airlines-bo-tri-them-may-bay-van-chuyen-thiet-bi-y-te-chong-
dich-102296549.htm (12)
13. https://cand.com.vn/Giao-thong/hang-khong-viet-ra-sao-neu-xung-dot-nga-ukraine-keo-dai--
i648330/ (13)
14. https://iife.edu.vn/quy-mo-gdp-viet-nam-nam-2022-va-2023-thay-doi-nhu-the-nao-theo-du-bao-
cua-cac-to-chuc-quoc-te/ (14)
15. https://www.vietnamairlines.com/~/media/FilesDownload/AboutUs/Investor-Relations/Thong-
Tin-Co-Dong/1banthongtintomtatvecongtydaichung.pdf (15)
16. https://baochinhphu.vn/vietnam-airlines-day-manh-tai-co-cau-tien-toi-phuc-hoi-va-phat-trien-
102220628172543001.htm (16)
17. https://static2.vietstock.vn/data/HOSE/2023/BCTC/VN/QUY%201/HVN_Giaitrinh_KQKD_Q1
_2023.PDF (17)

50
18. https://finance.vietstock.vn/HVN/tai-chinh.htm?tab=CTKH (18)
19. https://finance.vietstock.vn/HVN-tong-cong-ty-hang-khong-viet-nam-ctcp.htm (19)
20. https://vneconomy.vn/thi-truong-hoi-phuc-vietnam-airlines-giam-99-lo-trong-quy-1-2023-so-
voi-cung-ky.htm (20)
21. https://oriagency.vn/chien-luoc-cua-vietnamairlines (21)
22. https://brademar.com/khach-hang-muc-tieu-cua-vietnam-airlines/ (22)
23. https://vnexpress.net/vietnam-airlines-co-ty-le-cham-chuyen-cao-nhat-nam-2022-4567421.html
(23)
24. https://zingnews.vn/vietnam-airlines-co-ty-le-cham-chuyen-cao-nhat-nam-2022-
post1399394.html (24)
25. https://www.baogiaothong.vn/vietnam-airlines-tham-gia-thu-thach-chuyen-bay-ben-vungbao-ve-
moi-truong-d552548.html (25)
26. https://www.vietnamairlines.com/vn/vi/vietnam-airlines/trach-nhiem-xa-hoi/moi-truong (26)
27. https://text.xemtailieu.net/tai-lieu/quan-tri-rui-ro-trong-hoat-dong-kinh-doanh-cua-vietnam-
airlines-151016.html (27)
28. https://www.vietnamairlines.com/vn/vi/skyteam (28)
29. https://www.vietnamairlines.com/vn/vi/vietnam-airlines/investor-relations/financial-reports (29)
30. https://vietnambiz.vn/doanh-thu-quy-i-cua-vietnam-airlines-gap-doi-cung-ky-lo-giam-xuong-
thap-nhat-ke-tu-dau-dich-2023428203947189.htm (30)
31. https://vi.wikipedia.org/wiki/Hãng hàng không Quốc gia Việt Nam (31)
32. https://www.vietnamairlines.com/~/media/FilesDownload/AboutUs/Investor-Relations/Bao-Cao-
Thuong-Nien/2021-bao-cao-thuong-nien.pdf (32)
33. https://thanhnien.vn/cac-hang-hang-khong-viet-dang-co-bao-nhieu-may-bay-185912346.htm (33)
34. https://dokumen.tips/download/link/five-competitive-forces.html (34)
35. https://brademar.com/mo-hinh-5-ap-luc-canh-tranh-cua-vietnam-airlines/ (35)
36. https://hieuluat.vn/xin-hoi-vanbanluatcom-thoi-gian-gan-day-toi-t-1fb65-faqs.html (36)
37. https://gosmartlog.com/mo-hinh-hub-and-spoke-phat-kien-da-chuyen-doi-hoan-toan-nganh-van-
tai-va-phan-phoi/ (37)
38. https://vi.wikipedia.org/wiki/Vietravel_Airlines (38)
39. https://vietnambiz.vn/ganh-nang-chi-phi-tren-doi-canh-cac-hang-hang-khong-viet-
20200318185256349.htm (39)

51
40. https://m.traveloka.com/vi-vn/flight/schedules/lich-bay-vietnam-airlines (40)
41. https://www.qdnd.vn/y-te/tin-tuc/giua-thang-4-2023-dan-so-viet-nam-se-dat-moc-100-trieu-
nguoi-721505 (41)
42. https://vneconomy.vn/nhieu-chang-chay-ve-som-cuc-hang-khong-yeu-cau-tang-chuyen-den-cac-
diem-nong-du-lich-dip-nghi-le.htm (42)
43. https://www.tripadvisor.com.vn/Airline_Review-d8729180-Reviews-Vietnam-Airlines (43)
44. https://tuoitre.vn/nang-tam-dich-vu-duong-bay-vang-khach-vietnam-airlines-tan-huong-dieu-gi-
20221104114724926.htm (44)
45. https://www.tinnhanhchungkhoan.vn/tiep-da-phuc-hoi-cho-cac-hang-bay-viet-post321867.html
(45)
46. https://thitruongtaichinhtiente.vn/bang-xep-hang-thuong-hieu-tot-nhat-toan-cau-cua-yougov-
vinh-danh-momo-trong-top10-thuong-hieu-tot-nhat-viet-nam-38063.html (46)
47. https://advertisingvietnam.com/giai-ma-chien-luoc-giup-vietnam-airlines-gianh-giai-hang-hang-
khong-dan-dau-chau-a-ve-thuong-hieu-tai-world-travel-awards-2022-p20445 (47)
48. https://baochinhphu.vn/thu-tuong-thuc-day-thoa-thuan-giam-1-ty-usd-chi-phi-cho-vietnam-
airlines-102305599.htm (48)
49. https://skytraxratings.com/airlines/singapore-airlines-rating (49)
50. https://www.worldairlineawards.com/worlds-top-100-airlines-2018/ (50)
51. https://tienphong.vn/loat-tiep-vien-vietnam-airlines-treo-hashtag-xin-loi-cong-dong-mong-duoc-
doi-xu-van-minh-post1294846.tpo (51)
52. https://cand.com.vn/Giao-thong/vietnam-airlines-co-ty-le-cham-huy-chuyen-cao-nhat-i682736/
(52)

52
VIII. GRADES ON GROUPMATES

Người chấm

Thư Sơn Dương Thanh Quân Phương

Người nhận

Thư 9.5 9,5 10 9 10

Sơn 9 9,5 10 8 10
Dương 9,5 9 10 9,5 10
Thanh 9,5 9.5 9,5 9,5 10
Quân 9,5 9.5 9,5 10 10
Phương 9 9 9,5 10 9

53