Công Ty Cổ Phần Hàng Không Vietjet.pdf

REPORT RequirementGROUP ASSIGNMENT

Lecture: Nguyễn Thị Thanh NhànCOURSE : MICROECONOMICS - ECO111

Group Members: 5

1 Nguyễn Ngọc Hân - SS1706482 Nguyễn Thị Ngọc Hân - CS1713993 Nguyễn Hoàng Thông - SS1704944 Lê Xuân Tuấn Nhật - SS1600055 Thái Thị Anh Thư - SS170014

2.3 Business sectors (Primary sector // Secondary sector // Tertiary sector) 8

2.4 Demand and Supply 9

Case study: CÔNG TY CỔ PHẦN HÀNG KHÔNG VIETJETWebsite:http://www.vietjetair.com

Dinh district, Ha Noi city

Ba Dinh district, Hanoi city As the 57th largest corporation by 2021 according to the listof 500 largest enterprises in Vietnam (according to VNR500).

2 Body

2.1 Total asset, total capital, total revenue and total employee

Assets are all resources that a business owns and from which economic advantages can begained They include all gross investments, cash and equivalents, receivables, and otherassets Vietjet's total assets reached more than 45,197 billion VND in 2020, a decrease ofabout 3,662 billion VND from 2019 (48,859 billion VND), or 7% Assets and capital areinextricably linked, manifested in the capital that forms assets This demonstrates that totalcapital is equal to total assets and equal VND 45,197 billion In which the liabilities total30,218 billion VND and the equity total 14,987 billion VND Although the situation withcovid - 19 is convoluted, most other airlines are losing money, yet Vietjet is the soleprofitable airline at the moment Vietjet's after-tax profit would be VND 69 billion by theend of 2020 (Source: the financial report, 2020 ) Beside, Vietjet has consistentlyprioritized human resource development At this time, the total employees is 5,468 people,increase 792 individuals from 2019, or an increase of 8%, become one of the airlines thatdoes not lay off personnel throughout the 2020 epidemic season to secure business.Table 1.1

( Source : Audited Financial Report 2020 )

2.2 Organisation structure

Vietjet Air company is organized and operated according to the model as followed:General Meeting of Shareholders, Board of Directors, Supervisory Board and ChiefExecutive Officer/ Managing Director and Board of Management including VicePresidents and Chief Accountant Three legal representatives include: Chairman of theBoard of Directors, Chief Executive Officer and Managing Director.

In the organizational structure, the person with a high position is the Chairman of theBoard of Directors, Mrs Nguyen Thanh Ha and there are 6 members of the Board ofDirectors including: Madame Nguyen Thi Phuong Thao, Dr Nguyen Thanh Hung, Mr.Dinh Viet Phuong, Mr Luu Duc Khanh, Mr Chu Viet Cuong, Mr Donal Joseph Boylan.Besides that members of The Board of Management includes one Managing Director, oneChief Executive Officer, eight Vice Presidents and Chief Accountant And members of thesupervisory board consists of three members, who were appointed by the General Meetingof Shareholders and as well as others make up the board of organization structure ofcompany Moreover , the organization structure of Vietject Air Company has 7 subsidiariesand 2 affiliated.

( Source : Annual Report 2020)

2.3 Business sectors (Primary sector // Secondary sector // Tertiary sector)

Vietjet Air is a company that mainly deals in passenger and cargo transportation servicesby air and has successfully built a closed supply chain of aviation services In addition,Vietjet knows how to take advantage of technological innovation and apply e-commercetechnology to supply consumer demand for goods and services.

The main activity of the company is air transportation, which has been the core servicesegment of the company since the early days of its establishment This is the first airlinecompany in Vietnam to operate under the new generation airline model, which iscost-effective & flexible and provides a variety of services for customers to choose from.In addition, Vietjet Air is also a manufacturer that cooperates with Airbus and Boeing oncontracts through great commercial values and many incentives As an aircraft leasingcompany, always providing flight rental services for domestic and international travelagencies Vietjet always creates favorable conditions and looks for investmentopportunities to always provide good ground services at the airport, repair services andspecialized training in air transport.

2.4 Demand and Supply

Demand is the number of goods and services that consumers need to buy in a given period,corresponding to a given price and income The supply of a good tells us the quantity of agood that producers are willing to supply to the market and sell relative to prices,production possibilities, and the cost of production Specifically, in the period before theCovid-19 epidemic occurred Tourism has become immobile because people have limitedmovement, so Vietjet has encountered a serious lack of passengers As a result, customerdemand decreases, leading to greater supply than demand To stimulate demand, Vietjetimplemented measures to reduce airfares to limit losses However, when the Covid-19epidemic occurred strongly around the world, to ensure effective epidemic prevention,flights were forced to limit the number of passengers and the distance When supplydecreases, demand is greater than supply This is the main reason why airfares during thisperiod are pushed up Thereby, we can conclude that in the real market, there is a closerelationship between supply demand, and price.

2.5 Shortage or surplus

In the context of the complicated developments of the pandemic, which has greatlyaffected the aviation industry: the flight ban, the blockade order, the fear of the peopleabout the pandemic are the main reasons Viet Jet Air is a Vietnamese airline alsoaffected by the pandemic, the number of passengers plummeting, causing a seriousshortage of demand while supply exceeded demand After the covid-19 pandemic ended,the flight ban, the blockade order was eased along with the addition of vaccines for allages, the fear of disease was also eliminated, the demand for air travel increased Strong(Increase in passenger arrivals by 103,000 in January 2022 Source: Civil AviationAuthority of Vietnam) Creates a shortfall in the provision of air travel services Viet JetAir has exploited this opportunity, with low cost and good service in the price range, VietJet has attracted consumers thereby creating a lot of surplus value forbusinesses.According to financial statements In the first quarter of 2022, Vietjet announcedthat, compared to the same period in 2021, the airline recorded a growth of 113% inpre-tax profit thanks to the rapid recovery of passenger transport business and continuedexpansion of the cargo transportation business, with revenue growth in the first quarter of2022 was 76% and 94% respectively.

2.6 Revenue, Cost, Profit

Though the harsh challenges that Vietnamese airlines have faced in 2021 continued tosuffer setbacks due to the COVID-19 pandemic, it has showed strong recovery signalscame to Vietnamese airlines as revenue and profit growththanks to the nationwidevaccination campaign and the strict implementation of disease prevention regulations toguarantee safe operations and protect the health of the passengers and flight crew In thefourth quarter of 2021, Vietjet recorded a in comparison with the same period last yeardecreasing air transport revenue at almost 2.79 trillion VND The airline, however, gaineda consolidated revenue at nearly 13 trillion VND in 2021 with a consolidated after-taxprofit at 100 billion VND – an increase of 46 percent from the previous year In 2021,Vietjet has operated nearly 42,000 flights across its network with more than 5.4 millionpassengers onboard The airline has reported revenue of 2.95 trillion VND in cargotransport, achieving fast growth with cargo revenue in particular rocketing by over 200percent year on year Vietjet also optimises operating costs by flight hours, reducescharter fees, and receives support from the Government to reduce 50% of landing andtake-off costs, and to reduce 50% of environmental protection tax on jet fuel until the endof the year 2022, reduce the cost of ports and ground services to the minimum level inaccordance with the State's regulations to support the aviation industry In general, whilethe core business segments were affected by the epidemic, Vietjet promoted the freightsegment with the growth of revenue growth in goods increasing sharply by over 200%over the same period, reaching VND 2,954 billion.

2.7 Competitors

The aviation industry has benefited from low maintenance costs due to its new fleet ofaircraft Thanks to a bold, fast and modern development strategy and facilities, Vietjet'saviation industry has made great strides Quality air service is not only a product of theaviation industry but also a criterion for evaluating the quality of transportation Low-costairline Vietjet is a typical unit of our country with high quality and professionalism inproviding aviation services As a result, customers voted as "Airline with the besttransportation service in Vietnam" Vietjet Air uses low prices as a unique and competitivemarketing strategy to draw clients This can also be considered as a competitive advantageof Vietjet Air over other competitors such as Vietnam Airlines, Bamboo Airways, PacificAirlines, Vietjet holds 42.2% of the transportation market share (Annual Report 2020).

Generally, the company's rivals are Bamboo Airways (>12.3%), Vietnam Airlines (33.3%).Vietjet Air's biggest competitive advantage lies in its ability to manage costs and reducethe cost of providing their services This is also an important key to create a sustainablecompetitive advantage if we do a cost comparison between Vietjet Air and other domesticairlines These inimitable and irreplaceable sustainable competitive advantages help VietjetAir stand firm in the fiercely competitive aviation industry with a high rate of rejection.2.8 Market structure

The market structure focuses on maximising the domestic market Most airline companieshave an oligopoly market structure and Vietjet Air Group is no exception, becauseaccording to rivals' assessments, Vietjet Air operates in the field of delivering digitaltransformation projects in a quality-price manner, in order to satisfy customers' morevaried expectations and advance the growth of airlines and enterprises Freight servicesand ground handling services are recent business areas Oligopolistic competition thriveswhen firms, particularly Vietjet, are free to decide how to add new routes, and whenpromotions provide customers the chance to look for low-cost flights The results areexclusive in-flight value offerings and more pricing choices for passengers, and theconclusion is that oligopolistic competition market structure is drawn.

2.9 Strategies and applications

From the above analysis, we propose some strategies and applications to develop Vietjetair closer to customers and more stable in the market in the future Currently, Vietjet airappears to be constantly delayed, possibly due to some technical problems, weather, andas a low-cost airline company, Vietjet Air is overloaded with passengers, so the delay is ahuge impact on the company and customers To solve this situation, we propose a plan thatthe aircraft apron system must continuously streamline the slots of each airline in terms ofwaiting time, parking as well as take-off, and increase the scheduled flights as low asnight flight Besides, vietjet air should focus on communication and e-commerce to reachmore customers The company has just combined advertising on social networkingplatforms and created more incentives for customers so that they can trust and alwayschoose Vietjet air as the best airline in the future.

3 Conclusion

To sum up, through this report, we can have an overview of everything inside and outsideof Vietjet airline company We can know all the resources of the company, theorganizational structure as well as the market structure It helps us to analyze whichbusinesses sectors of the company and through learning the company's supply - demand,we can know the reason why the company has surplus and shortage Besides, we can alsoknow the company's revenue, costs and profits, especially the competitors that thecompany faces in the market in 2020.

4 References

Pindyck, R.S., Rubinfeld, D.L and Mehta, P.L., 1995 Microeconomics (Vol 4).Englewood Cliffs, NJ: Prentice-Hall.

Annual report 2020

Audited Financial Report 2020

Vneconomy -Thị trường hàng không Việt năm 2021 và triển vọng 2022

https://vneconomy.vn/thi-truong-hang-khong-viet-nam-2021-va-trien-vong-2022.htmVietnam - Vietjet reports profit in 2021 despite impacts from COVID-19

One2fly -Thị phần nội địa của các hãng hàng không tại Việt Nam

https://one2fly.vn/thi-phan-noi-dia-cua-cac-hang-hang-khong-tai-viet-nam/MarketingAI - Chiến lược marketing của Vietjet air và những con số ấn tượnghttps://marketingai.vn/chien-luoc-marketing-cua-vietjet-air

Vneconomy - Thị trường hàng không Việt năm 2021 và triển vọng 2022

https://www.vietnamplus.vn/chuyen-gia-dua-ra-nhung-ly-do-khien-gia-ve-may-bay-bi-day-len-cao/635505.vnp