Analyze revenue, expenses, prot and optional nancial indicators of vietnam airlines in the last 3 years

Vietnam Airlines is the national airline of Vietnam, a four-star airline, under the Airlines Corporation of Vietnam and established in April 1993.. The national airline, Vietnam Airlines

Team 4:

Nguyễn Thị Phương

Vũ Tùng Dương

Nguyễn Thị Thanh Thanh

Pham Anh Thu

Nguyén Anh Quan

Pham Huy Hoang Son

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TABLE OF CONTENT

1 BACKGROUND OF THE COMPANY 2

2 REVENUE T PROFIT AND FINANCIAL INDEXES OF THE COMPANY 3

3 DIVERSIFICATION TYPE 7

4 THE CAPABILITIES OF THE COMPANY 9

5 GENERIC COMPETITIVE POSITION MATRIX 12

Vietnam Airlines is the national airline of Vietnam, a four-star airline, under the Airlines Corporation of Vietnam and established in April 1993 Currently, Vietnam Airlines is a consortium consisting of Vietnam Airlines, Pacific Airlines and VASCO, under the management of a council appointed by the Prime Minister of Vietnam The head office is located at 02 Noi Bai and Tan Son Nhat international airports

The national airline, Vietnam Airlines (VN) was established in 1956 as Vietnam Civil Aviation The airline operates from hubs at Noi Bai International Airport (HAN) in Hanoi and Tan Son Nhat International Airport (SGN) in Ho Chi Minh City Da Nang International Airport (DAD) is a secondary transit hub As a member of the SkyTeam alliance, Vietnam Airlines flies to about 20 domestic destinations and about 30 international destinations in Asia, Oceania and Europe The airline also has codeshare agreements with more than 20 other airlines Vietnam Airlines’ fleet of

92 aircraft is configured with 1 cabin (Economy), 2 compartments (Business Class and Economy Class) or 3 cabins (Business, Premium Economy and Economy Class)

The airline specializes in domestic routes and to Southeast Asia, East Asia, Europe and Oceania, with 97 routes to 18 domestic destinations,35 international destinations, making an average of 360 flights per day With the vision of becoming Asia’s leading airline and taking innovation as the motto in innovation, Vietnam Airlines always innovates constantly in all fields Over decades of development, the Group has affirmed its position as a national airline with a global scale of operation and regional stature

The scope of analysis in this report is Vietnam Airlines in terms of the Vietnamese national market

- After the Covid 19 pandemic, the demand for people to travel by plane increased sharply It can

be seen that the revenue figure of 2022 is more than the whole of 2020 plus 2021

+ In 2022, Vietnam Airlines is estimated to transport more than 18 million passengers, reaching 107.8% of the plan and 211.9 thousand tons of cargo, revenue reaching VND 72,359 billion, reaching 121% of the plan, of which the parent company will reach VND 50,617 billion, reaching 112% of the plan

- To be able to do this, Vietnam Airlines has focused on upgrading in depth to bring the best flying experience to passengers And in 2022, Vietnam Airlines was honored by the Ministry of Industry

and Trade and the National Trademark Council

+ Promoting its role as a national airline, Vietnam Airlines actively participates in activities contributing to regional economic and social development across the country, through incentive programs, tourism stimulus, investment, trade and tourism promotion cooperation with provinces and cities At the same time, social work, spreading human values is always

of special interest to the company, with notable activities in 2022 being the program to donate bonus miles, convert into air tickets and air services for domestic and foreign volunteer groups to move, perform duties

B COST

Current corporate income tax costs 212T | 256T | 301T

Deferred corporate income tax expenses | 5T 57T (23T)

- It can be seen that most types of costs of VNA are increasing This can also understand for them that after the pandemic to be able to compete with low-cost airlines, they have to step up marketing

+ Vietnam Airlines quickly changed its marketing strategy to match new market trends Transforming the proportion of flexible services, building a brand image that cares about the community, promoting digital transformation are some of the series of reforms in Vietnam Airlines’ successful marketing mix strategy

- In addition, although VNA has been invested in the best products, they continue to upgrade services to create the best experience on the route

- However, there is still 1 more factor causing the costs to increase, which is the increase in the price of jet fuel

+ The company has built a fuel price scenario in 2022 of 138-140 USD / barrel, 2 times higher than in 2021 But as of June 28, 2022, fuel prices have risen above $162 per barrel

- In addition to the intense Russia-Ukraine war, in a report to the Ministry of Transport on March

25, the Civil Aviation Administration of Vietnam said that the Russia- Ukraine war has negatively impacted, increasing the costs of Vietnamese airlines

+ The fighting has prompted many countries to ban airlines from operating air traffic routes over Russia Therefore, to reach Europe, Vietnamese airlines have to change their routes to

costs ranging from about $10,600 to $21,200 per trip

Profit on sales and service provision (7A436T) | (10,018T) | (2,625T)

Net profit from operating activities (11,897T) | (13,132T) | (10,187T)

Profit after corporate income tax (11,178T) | (13,278T) | (10369T)

Other profits 937T 166T 96T

After-tax profit of the parent company (10,9271) | (12,907T) | (10,452T)

Uncontrolled after-tax profits of the public | (251T) (371T) 83T

- The positive recovery of Vietnam Airlines in 2022 can be seen through statistics from the financial statements, the profits are reduced, although there are still losses, this is an important milestone of VNA after the pandemic

- The main supporting factor for Vietnam Airlines in particular and Vietnam's aviation industry in general is the tourism opening policy starting from March 3/2022

+ Asa result of transporting in the first half of 2022, Vietnam Airlines Group reached nearly 9.5 million passengers, up 24.6% compared to the plan Vietnam Airlines’ cargo and parcel transportation reached 113 400 tons, up 18.3% over the same period, approximately reaching the set target Through flexible sale programs, consolidated revenue in 6 months reached VND 30,650 billion, exceeding 35.3% of the plan, the consolidated loss before tax was VND 1,309 billion lower than the plan

- However, profit growth has not been strong because international visitors are the main source of profit for all companies in the industry (airports, airline services, airlines) The resumption of international routes is estimated to be slow during the year, as key markets such as China, South Korea and Japan have yet to reopen to varying degrees

promotions 2022, Mid-night Sales — Up to 20% discount on Vietnam Airlines air tickets

- It also comes from preferential policies when buying Vietnam Airlines flight tickets + When you buy Vietnam Airlines tickets and become a Lotusmiles member, you will receive many good incentives such as: Accumulate miles that are usually converted to award tickets, increase baggage allowance, get seat upgrades, use of business class lounges, priority services such as (boarding gate, Choose a seat in advance, check in, give miles for your birthday ) and many other useful incentives

- VNA's financial performance is in a bad direction as the share price has continuously declined

at the beginning of 2022 The big reason comes from the fact that the aviation industry has not been able to restore the business situation after being heavily hit by the Covid epidemic and regulations on flight route restrictions when the Covis epidemic became stressful

+ From 2020 to now, Vietnam Airlines (HoSE: HVN) stock price has only fluctuated between 12,000 - 27,000 VND/share Even in the last months of 2022, the market price of this stock fell below the threshold of VND 13,000

- As a result, in September 2022, the Ho Chi Minh City Stock Exchange sent a notice to Vietnam Airlines Corporation, noting the possibility of delisting Vietnam Airlines shares due to persistent business losses and negative equity

+ In2020 and 2021 both recorded losses Negative equity is nearly VND 4,900 billion Vietnam Airlines is also incurring short-term liabilities exceeding current assets in the amount of more than VND 36,425 billion, overdue liabilities amounting to more than VND 14,850 billion

- As aresult, VNA has not been delisted, although it is still trading at a loss, but because the stock

is under regulatory control attached to HOSE's decision dated March 31, 2022

+ HVN escaped delisting by selling Cambodia Angkor Air

VIETNAM AIRLINES' business lines in Vietnam include:

A Main lines of business:

Air transport for passengers and cargo

Maintenance of aircraft, engines, spare parts, aviation equipment and other technical equipment; manufacturing components, spare parts, aircraft supplies, technical equipment and other contents

in the field of aviation industry

Providing technical services and spare parts for domestic and foreign airlines; export and import

of aircraft, engines, spare parts for aviation supplies and equipment (lease, lease, lease, purchase and purchase and sale) in accordance with the State’s regulations

B Business lines related to the main business lines:

Multimodal transport; provision of ground commercial technical services; services at passenger terminals, cargo terminals and apron services at airports and airports; freight forwarding services; producing, processing, exporting and importing food for service on aircraft, equipment for air transport lines

Investment and exploitation of technical infrastructure at airports: Passenger and cargo terminals, technical infrastructure, equipment for air transport lines and synchronous services in air transport chains

Export, import and supply of gasoline, oil, aviation grease, specialized liquids and other petroleum at airports and other locations

Agency services for airlines, manufacturers of aircraft, engines, equipment, spare parts and aircraft supplies, domestic and foreign transport and tourism companies; providing commercial, tourism, hotel, duty-free sales services at air terminals and in provinces and cities; other air

services

Vietnam Airlines’ diversification is single business Because it only has business is the service

of transporting customers and goods

C Justify:

The strength of Vietnam Airlines is different from its competitors is the comfort of the aircraft they are operating and using It can be mentioned as BOEING B787:

very good, such as: "The humidity and pressure in the cabin are kept at the same level as the pressure at an altitude of 1.8km, while this index in other aircraft models is 2.4km Asa result, passengers will not feel tired during the flight.”

- Or you can add the AIRBUS A350 family Although not equipped with advanced technology like the BOEING B787, this aircraft integrates all the amenities that customers need

- Their side services are also extremely attractive such as duty-free sales on board from January 1,

2016 This is a milestone showing the creativity in business to attract customers to Vietnam

Airlines

+ In 2016, Vietnam Airlines introduced an in-flight duty-free shopping service called Lotushop

to the market and received positive feedback from passengers In October 2018, Lotushop officially returned with 4-star quality when cooperating with the "tycoon" of brand distribution from Hong Kong King Power

=3 Starting from the name Vietnam Airlines abbreviated from "Vietnam national airline" shows the class With this name, the airline easily positioned the brand, attracting a number of customers to trust the national branded service despite the higher ticket prices than others

- Moreover, the initial orientation was to become a 5-star international airline, so the image of Vietnam Airlines is also different from other low-cost airlines They are very delicate when using

“Ao Dai” costumes for employees to enhance the beauty of Vietnamese people

- Vietnam Airlines also pays great attention to applying technological elements to the ticketing process to bring the best experience to customers

- From the above outstanding evidence, it can be shown their success, when they always innovate

to suit the needs of customers and also to attract customers, to affirm as the leading wing of Vietnam's aviation industry

investor ANA Holdings

Inc (Japan), raising

g: VNA sets specific

targets for the airline

provided to the press

and customers VNA's

plan also involves

staff training and

two roles: The first is

the owner, the

second is the state

manager With the

brands, having many customers’ records so

businesses backing they can suggest such as service promotions to them companies, airport Internet sales: Facebook

7 days a week for consumer guidance or assistance

Equipped with Wireless streaming system right

on the A32 1neo aircraft, bringing a new entertainment experience to passengers Apply many payment methods using new technology platforms such as: payment by QR code, online payment SOFORT Banking

The driving force for management in building Business-level strategies is the increasing demand from customers They are now demanding higher flight quality for a lower price Both low-cost airlines and Vietnam Airlines are trying their best to satisfy their customers It bridges the gap in price and service quality between them

Faced with that situation, Vietnam Airlines decided to apply a different strategy Through differentiation, they provide customers with products with differentiated features and values Firstly, they built a new avatar image as "golden lotus", making a strong impression and suitable for Asian psychology

Second, Vietnam Airlines also differentiates its products by enhancing convenient and safe flights For example, aircraft and infrastructure are modified to accommodate people with disabilities; human resources developed/trained (pilot staff, maintenance & overhaul); The fleet

is also enhanced in quantity and quality

Moreover, they also perform differently in ionic strategy by achieving unmatched network compared to domestic competitors They will expand their network from 26 international destinations and 20 domestic destinations (2010) to 44 and 23 destinations (2020) respectively When a company differentiates its products, it can often charge high prices for its products or

services in the market

Applying a differentiation strategy, Vietnam Airlines focuses on providing unique and high- quality products and services at high prices Vietnam Airlines makes customers believe that higher prices are justified and they are provided with more valuable services (tangible as well as intangible) Airlines emphasize Vietnam cuisine as a feature of VNA flights, newly designed tableware, as well as providing pajamas, blankets, bed linen to bring comfort and luxury experience most important on long journeys

Most importantly, to become the leading digital airline, VNA has worked hard on applying modem technologies Skywise, Oracle cloud and new mobile versions of the application have

more advanced features

Most of the tasks in Vietnam Airlines’ differentiation strategy are achieved through the advantages of a state-owned company with 75% government backing, such as huge capital, political and grassroots support basic infrastructure available

Target customer orientation

Vietnam Airlines’ customers in the target market are classified based on travel purposes, nationality and income:

¢ Japanese guests: high requirements for service quality

¢ Korean guests: relative requirements for service quality

¢ Taiwanese visitors: high requirements for service quality

¢ French visitors: often accompanied by large groups traveling to Southeast Asian countries; is

a very approachable, funny guest, often planning to travel very far away

¢ Australian and American guests: these are guests with a high standard of living, large consumer demand, so they require very high service quality

- By income:

¢ Economy and economy class: guests are mainly employees, students and students

¢ Business class: guests are mainly businessmen, celebrities and successful people

Research product attributes

- Since 2015, Vietnam Airlines has oriented to invest in converting from 3-star to 4-star airline rating, focusing on major upgrades in 2 service classes, mainly Business Class (C class) and Premium Economy Class (Delux) One of the basic criteria for an airline to have a 4-star rating

is that the aircraft must have absolutely flat seats Since July 2015, Vietnam Airlines has officially put into operation two new generation aircraft Boeing 787-9 and Airbus 350-900 If you are a regular customer of Vietnam Airlines, the airline has data to know where you like to sit, what food you eat, what kind of newspaper you read, what kind of movies or music you like to watch Even on that trip, you only use Economy Class Before you board, there is enough of this data

condition, but with the service profession, suppliers increasingly have to pay attention to very small details to bring satisfaction to passengers” - leaders of Vietnam Airlines shared

As a 4star airline, Vietnam Airlines also offers special services for young passengers in addition

to continuing the preferential price policy equal to 70% of the regular price for children under

12 years old or meals exclusively for children Traveling with children, please ask the cabin crew

to provide them with a catalog of 6 different sets of toys according to age and gender Food service is comprehensively invested, from tableware, glasses, cups, wine cabinets in C class to a diverse menu with high quality healthy foods The airline also cooperates with top chefs from high-end hotels to design, unique dishes and beverages to give passengers exquisite experiences of Vietnamese and world culinary culture

No matter what class you sit in, you can enjoy the AVOD on-demand entertainment system (watch live TV, movies, music, games ) on the large LCD liquid crystal screen and ancillary applications in the seat Economy Class has not been upgraded much because when it was still

at 3 stars, Vietnam Airlines’ economy class service was rated to a better standard than 4 stars The 4-star airline is rated to provide products of good standards on all types of travel combined with the standards of onboard and airport staff One of the important factors in VNA's service sector is to equip professional service skills at all customer contact points, from a team of 18 members Even ground staff such as ticket offices and frontline departments must undergo basic

to advanced customer service training Customer service training syllabus covers every detail about dress code, how to greet, how to smile, how to communicate, eye contact and language, and difficult situations to handle Customer service skills training will equip employees to always

be courteous, courteous, enthusiastic, attentive and ready to serve

Among the pre-flight services that an airline provides, the lounge service for priority guests is the most enjoyable and engaging experience Lounge service is not only a quiet space to wait for departure time, to enjoy high-class drinks, typical dishes of each region but also a way to access the culture and quintessence of each destination in the passenger's journey Since upgrading the 4star service, the number of passengers using Vietnam Airlines’ C and Deluxe services has increased dramatically In key routes to the UK and France, the coefficient of using C and Delux seats reaches 70-80%