Poor ground service agent attitude at Vietjet aviation joint stock company

UNIVERSITY OF ECONOMICS HO CHI MINH CITY International School of Business Nguyen Thi Thuy Trang POOR GROUND SERVICE AGENT ATTITUDE AT VIETJET AVIATION JOINT STOCK COMPANY MASTER OF BUSINESS ADMINISTRATION Ho Chi Minh City – Year 2019 UNIVERSITY OF ECONOMICS HO CHI MINH CITY International School of Business Nguyen Thi Thuy Trang POOR GROUND SERVICE AGENT ATTITUDE AT VIETJET AVIATION JOINT STOCK COMPANY MASTER OF BUSINESS ADMINISTRATION SUPERVISOR: LE THI THANH XUAN Ho Chi Minh City – Year 2019 Table of contents Table of contents i List of figures iii List of tables iii Abbreviation iv EXECUTIVE SUMMARY CHAPTER 1: COMPANY BACKGROUND 1.1 History 1.2 Vision 1.3 Mission 1.4 Product and service 1.5 Business development strategies 1.6 Target customer 1.7 Market share 1.8 Business performance CHAPTER 2: PROBLEM IDENTIFICATION 2.1 Problem context 2.2 Symptom analysis 2.3 Potential problems 12 2.3.1 High competition 13 2.3.2 Visa barriers 18 2.3.3 Service quality and customer satisfaction 19 2.3.4 Uncomfortable air travel experiences 22 2.3.5 Ground staff’s attitude 24 2.3.6 Poor of inflight services 27 2.4 Initial symptoms and potential problems 28 2.5 Main problem validation 29 2.6 Problem consequence 33 CHAPTER 3: CAUSES OF PROBLEM 34 3.1 Potential causes 34 i 3.1.1 Stress on work 34 3.1.2 Training 35 3.1.3 Motivation and promotion 36 3.2 Main cause validation 37 CHAPTER 4: SOLUTION 43 4.1 Literature review 43 4.1.1 Content of training 43 4.1.2 The delivery methods of training 43 4.1.3 Training sources 44 4.2 Alternative solution 44 4.3 Alternative solution 46 4.4 Alternative solution 48 4.5 Selected solution 50 CHAPTER 5: ACTION PLAN 53 CHAPTER 6: CONCLUSION 58 CHAPTER 7: SUPPORTING INFORMATION 59 7.1 Methodology 59 7.2 Information of in- depth interviews conducted 59 7.2.1 In- depth interview – section 59 7.2.2 In- depth interview - section 61 7.2.3 In- depth interview - section 70 REFERENCE 74 APPENDICES 78 ii List of figures  Figure 1.1: Business model  Figure 1.2: Vietnam aviation market size in annual passengers 2011 to 2016  Figure 1.3: Vietjet business performance 2017  Figure 1.4: Vietnam aviation growth  Figure 3.1: Vietjet overall service quality rate 2017- 2018  Figure 3.2: Service quality rate by services provided 2017- 2018  Figure 3.3: Vietjet Customer’s complaints 2018  Figure 3.4: Vietnam air transportation market share 2018  Figure 3.5: Comparison image comparison between VNA and Vietjet  Figure 3.6: Price comparison of four Vietnam aviation companies  Figure 3.7: Bamboo transportation term and regulation  Figure 3.8: Vietjet transportation term and regulation  Figure 3.9: Phases of the Air- Travel Experience  Figure 3.10: Total of delayed flight first half of 2018  Figure 3.11: Initial symptom and potential problems map  Figure 3.12: Initial symptom and main problem map  Figure 4.1: Initial causes and effect map  Figure 4.2: The general process of initial training for ground staff in Vietjet  Figure 4.3: Final causes and effect map List of tables           Table 3.1: Vietjet KPI performance 2018 Table 3.2: Service quality rate by services provided Table 3.3: Reasons customers choose Vietjet Table 3.4: Summary passenger’s interview Table 3.5: Comparison of satisfaction rate 2017- 2018 Table 3.6: Rate of staff attitude satisfaction- 2018 Table 3.7: Task accomplishment evaluation – 2018 Table 3.8: Inflight service quality rate Table 3.9: Ground staff evaluation report 2018 Table 5.1: The costs of private course of training ground service agents and recurrent training  Table 5.2: Cost of outsourcing initial training course and recurrent program  Table 5.3: The costs of consulting specialists and recurrent training  Table 5.4: Action plan of training program iii Abbreviation Index Abbreviation Description CAAV Civil Aviation Administration of Vietnam CAPA Centre for Aviation FSC Full Services Carrier HR Human Resources HRM Human Resources Management LCC Low Cost Carrier VNA Vietnam Airlines Vietjet Vietjet Aviation Joint Stock Company iv EXECUTIVE SUMMARY The aviation industry in Vietnam becomes more competitive in recent years Vietjet Aviation Joint Stock Company now has to compete with various airlines and one of big rivals is Vietnam Airlines, the state owned organization with famous reputation Vietjet attempts to retain loyal customers and establish themselves, so they have to pay attention on improving the service quality rate It is not a stretch to say that customer retention in service industry depends on customer service Today, customers are more knowledgeable of their options among various offerings, which is the main reason that airlines seek to enhance customer services The purpose of this research is to explore the causes of poor of customer service attitude of Vietjet ground service agents This problem is searched through the symptoms of KPI achievement failure and low service quality rate year by year Though the internal data combined with in depth interviews, the thesis has defined three potential problems, which are high competition, visa restrictions and customer dissatisfaction In the issue of dissatisfaction, there are three elements contributing to that are uncomfortable air travel experiences, ground staff attitude and poor of in- flight services By the method of collecting data, literature supported and interviews, the thesis finds out main problem leading to customer dissatisfaction and KPI achievement failure is unprofessional ground service agent’s attitude The findings of this thesis reveal that main cause of staff attitude problem is the poor of initial training and recurrent program for ground service agents working at airports In the current of Vietjet context, the most suitable solution suggested is outsourcing consultants instructing initial training course and conduct e- learning system for existing staff periodically The findings are investigated in details accompanied with recommendation and detailed implementation plan for board of management consider with an aim to increase level of service quality rate, they also are known as foundation for customer satisfaction and enhance passenger transportation revenue for airline |P a g e CHAPTER 1: COMPANY BACKGROUND 1.1 History Established on 23rd July, 2007, Vietjet Aviation Joint Stock Company (Vietjet) operates on low cost model transportation to offer travelling services that would accommodate demands of Vietnamese and international passengers Vietjet always aims to provide safe flights with excellent service quality in domestic and Asian region Vietjet spent four years on good preparation in resources, systems and finance to ensure sustainable development when joining to Vietnam aviation industry In 2018, Vietjet has met the air travelling demand of millions passenger, contributing to the growth of Vietnam aviation and tourism industries and the economic development as well After years taking off, Vietjet has established itself in aviation market with a large portion of market share; achieved significant milestones in the journey of sky conquering Figure 1.1: Business model- Source: Vietjet annual report 2017 |P a g e 1.2 Vision Vietjet always aim to be a multi-national aviation group with the various network which covers the whole Vietnam regions and the global Vietjet does not lonely provide aviation services but also consumers product based on e-commerce platform Become a favorite and trust airline, which receives credibility from customers 1.3 Mission To operate and develop domestic, regional and international flight network To create breakthrough in aviation services To make flying a popular means of transport in Vietnam and in the world To bring joyfulness, customer satisfaction by providing luxurious and exceeding expectation services with friendly smiles and professionalism 1.4 Product and service Vietjet makes continuous efforts to cut down cost and unnecessary expenses on tickets prices to make air means of transportation more affordable for the majority of customers Vietjet focuses more on product research and diversify its segmentation as well as to make services more outstanding Vietjet operates on low cost strategy with some changes to hybrid model Besides its standard low-cost economy ticket price (Eco), Vietjet has launched luxury services for premium objectives called “Sky-boss” ticket Using Sky-boss services, passengers can have special privilege like changing flight time no fee of charge, free check-in baggage, using VIP lounge, entitled to use priority check in and boarding to aircraft, in- flight complimentary food and beverage Operating on low cost strategy, Vietjet also offers additional services called “Ancillary” which an aim to improve passenger’s experience and comfort when flying with Vietjet Vietjet has introduced kiosk check-in system in three international airports, web check-in and mobile check-in to release pressure in high seasons, make procedure shorten and cut waiting time for passengers Vietjet has launched “Sky-shop” services for further interesting and comfortable travel experiences for customers With “Sky-shop” service, passengers can taste hot delicious meals bringing unique culture of regions and countries flying to The carrier also |P a g e provides in- flight shopping call “Duty free merchandise” with small souvenir, perfume, cosmetic and jewelry 1.5 Business development strategies In 2020- 2025, Vietjet continues to expand domestic and international routes: launch new routes connecting global airports and optimize frequency to local routes, especially prior to North Asia, Northwest Asia, ASEAN market Besides expanding market, Vietjet maintains strong brand health to enhance reputation and credibility with stakeholders including passengers, partners, which helps to nurture sustainable development for firm Continue to research and develop customized services and products on e-commerce platforms, enhance cost management and deploy high tech, cost savings application for operation 1.6 Target customer Vietnam’s local carrier Vietjet is helping to stimulate the traveling demand of customers Vietjet establishes itself with new generation airline with low cost strategy Segmentation that Vietjet aims at is limited- travel budget customer, who cannot be able to afford for high fare Most of Vietjet’s passengers are price-sensitive, who have more free time and not depend much on schedule’s change Completely new customer segmentation: customers are using the services of other means of transport like trains, automobiles with the remarkable utility of aviation services 30 percentages of Vietjet customers who first go on air Vietjet helps Vietnamese customers can approach to fast and modern air transportation with reasonable price, for more experience and comfort to fly with Vietjet 1.7 Market share Vietjet has driven a large portion in significantly growth, especially in domestic market In 2018, Vietjet has outperformed other carriers, maintain its leading position in domestic air transportation with 45 percentages in market share During first months of 2018, Vietjet has conducted the total number of 89,690 flights, increase approximately 22 percentage compared to this period last year In international market, Vietjet continues to expand flight network with strategy to develop brand name in global market Vietjet has |P a g e and ask senior colleagues However, skills to negotiate, solve situation is not competent Some new staff are embarrassed when communicating or persuading passengers Some have limitation in interpersonal skills, which creates misunderstanding for customers Nguyen Thi Thuy Trang: As you discussed, company does not have officially initial training and recurrent program as well due to limited budget However, the current issue, most of ground staff have unprofessional performance in work, which causes arising complains in passengers via media method This problem seriously affects to our brand image With the role of Training Director, you think we should consider solution training for this issue? Mr Quoc: Yes This is the problem that we consider Training method for ground service agent still be considered to meet the job requirement and budget Currently, Vietjet use internal source with personnel and tailored materials to provide initial course for ground staff This method can save a lot However, training quality still not be improved due to limitation in instructors and standard training materials We consider to send key person trained by famous organization and they will become key instructors for our company Nguyen Thi Thuy Trang: Sending key persons trained will create gap and take time for releasing Have you got any other solution? Mr Quoc: Yes, besides, we consider about outsourcing Outsourcing is the tendency in human development, which have more advantage than in- house training With some general subject, we can utilize instructor of internal sources In some specific subjects concerning personal skills, inviting consultants or specialist is one of the considered options Besides internal instructors of company get, consulting specialist in soft skills will supplement complete training program with more effective than before With existing ground staff, we need build up complete recurrent program periodically with strict evaluation and procedure E- training in systems is the most suitable method with Vietjet context and specific features of staff working on shift Nguyen Thi Thuy Trang: Many thanks Mr Quoc for sharing I think all information you provide will help me complete my research Have good afternoon, Sir 73 | P a g e REFERENCE (1) Adler N, Liebert V Joint impact of competition, ownership form and economic regulation on airport performance and pricing Transportation Research Part A: Policy and Practice 2014 Jun 1;64:92-109 (2) Anderson EW, Sullivan MW The antecedents and consequences of customer satisfaction for firms Marketing science 1993 May;12(2):125-43 (3) Anderson CU Training outsourcing on the decline Chief Learning Officer 2008;7(9):62-4 (4) An M, Noh Y Airline customer satisfaction and loyalty: impact of in-flight service quality Service Business 2009 Sep 1;3(3):293-307 (5) Artal-Tur A, Pallardó-López VJ, Requena-Silvente F Examining the impact of visa restrictions on international tourist flows using panel data Estudios de Economía 2016;43(2):265-79 (6) Babbar S, Koufteros X The human element in airline service quality: contact personnel and the customer International Journal of Operations & Production Management 2008 Aug 15;28(9):804-30 (7) Babin BJ, Boles JS Employee behavior in a service environment: A model and test of potential differences between men and women Journal of marketing 1998 Apr;62(2):77-91 (8) Baker D Are you throwing money away by outsourcing? 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