Solutions to expand the market for cargoes transport of Vietnam Airlines to 2015

1.1 Overview of Vietnam Airlines Corporation...1 1.2 Problems should be solved...2 1.3 The project’s objectives ...2 1.4 Research’s method of the project...2 1.5 Application’s scope...2

PHAM QUANG MINH

SOLUTIONS TO EXPAND THE MARKET FOR CARGOES TRANSPORT OF VIETNAM AIRLINES TO 2015

FINAL PROJECT

MASTER IN BUSINESS & MARKETING MANAGEMENT

Tutor: PHD,Nguyen Thi Lien Diep

Ho Chi Minh

2007

I, Pham Quang Minh, prepared and conducted this business project “Solutions To Expand The Market For Cargoes Transport Of Vietnam Airlines To 2015”, as final project of our MBMM1 program

With the approval and great advices from Phd Mrs Nguyen Thi Lien Diep and Mr

Ha Duy Quang, Deputy Operational Director Of Tan Son Nhat International Airport Ground Handling Services (TIAGS), this project has been accomplished by myself and served my current company as a real case

I trust the legality of all references, information sources and materials using to complete the project

The author wishes to express her profound indebtedness to the courtesy advisor of Phd Mrs Nguyen Thi Lien Diep and for her valuable guidance, document offer and encouragement during the course of this work Her helpful suggestions, supervision and comments have greatly improved the quality of this work

I also wish to express his faithful gratitude to Dr Tran Anh Tuan and Professor Jean Pierre Bayens for kindly consenting to be member of my project examination committee

I would like to convey my sincere thanks to Cargo Planning and Marketing Department of Vietnam Airlines for providing the information and general support enabling me to undertake of the Master of Marketing and Management program, and warmest thanks to my mentor, Deputy Operational Director, Mr Ha Duy Quang, who offered me valuable ideas for the final project

I hope to send my thanks to the two enthusiastic coordinators of our course Mr Serge and Ms Bao Tran who have supported us so much in relationship with the professors of SBS and OU as well as all given us convenient materials from Open University for this course

- ICAO - International Civil Aviation Organisation

- IATA - International Air Transport Association

- AAPA- Association of Asian-Pacific Airlines

- WB: World Bank

- IMF - International Monetary Funds

- CAAV - Civil Aviation Administration of Viet Nam

- VNA -Vietnam Airlines Corporation

- NAA – Northern Authority Airport

- SAA – Southern Authority Airport

- MAA – Midern Authority Airport

1.1 Overview of Vietnam Airlines Corporation 1

1.2 Problems should be solved 2

1.3 The project’s objectives 2

1.4 Research’s method of the project 2

1.5 Application’s scope 2

CHAPTER II 3

ACTUAL SITUATION OF THE CARGO TRANSPORT OF VIETNAM AIRLINES DURING RECENT YEARS 3

2.1 The process of establishing the cargo transport of Vietnam Airlines 3

2.2 Analysis of the internal environment related to activities of the cargo transport of Vietnam Airlines 3

2.2.1 The internal sources, we will analyze following sources: 3

2.2.2 Operational analysis of the cargoes transport of Vietnam Airlines 5

2.3 Analysis of the external atmosphere impacts to the cargoes transport of Vietnam Airlines 7

2.3.1 Macro environmental factor: we evaluate by 5 factors impacts to the macro environment 7

2.3.2 Micro environmental factors 7

CHAPTER III 10

SOME SOLUTIONS TO DEVELOP THE CARGOES TRANSPORT OF VIETNAM AIRLINES 10

3.1 Objectives of the cargo transport of Vietnam Airlines from 2007 to 2015 10

3.1.1 Prediction of the market of the cargo transport 10

3.1.2.2 The increase’s targets of the cargo transport of Vietnam Civil

Airlines sector 11

3.2 Some solutions 13

3.2.1 Establishment of the solutions by analyzing the matrix SWOT 13

3.2.2 According to my subjective assessment and exchanges with experts in the airline sector, we would like to choose some solutions with the high feasibility to expand the cargoes market of Vietnam Airlines as follows : 14

3.2.2.1 Solutions to expand the size of numbers and competence of the fleet and cargo aircrafts to compete on the market (S2,3,4,5 + O1,2,,3,4,5,6) 17

3.2.2.2 Solutions used price’s policies of the products to increase the competitive competence (S1,2,3,4 + T1,2,3,4) 18

3.2.2.3 Solutions to create the financial source to overcome the deficient situations of the investment capital for the business activities of the enterprise (W1,2,3,4,5 + T1,2,3,4) 19

3.2.2.4 Solutions to increase the service quality of transport, supporting services, material facilities in the cargoes transport (W5 + O1,2,3,4,5,6) 20

3.2.2.5 Supporting Solutions 23

CHAPTER IV 26

CONCLUSION AND RECOMMENDATION 26

4.1 Conclusion 26

4.2 Recommendation to Vietnam Airlines 26

REFERENCES

remarked the important event in 1996 – Vietnam Airline Corporation was established The business competence of VNA has been developing, enhancing to become an international airline In addition to trading in passenger transport, goods transport business has been one of strong points of VNA during recent years

After trading in transport business for a long time, VNA got some specific achievements

However, at the moment, as VN step by step integrates into the world economy, opens the domestic market to receive the investment waves from foreign countries, the need of goods transport by airlines is very high What VNA should do to expand the potential goods market in the future together with facing competitions with other large airlines in the local and international area

With the support of Associate Professor Nguyen Thi Lien Diep and Mr Ha Duy Quang – Vice Operating Director of TIAGS, on the basics of applying theories of marketing in general and Business Marketing Planning in particular, together with some available documents of VNA, the author decides to choose the project “ Solutions to expand the goods market of VNA up to 2015”; A potential field but has not been exploited enough in recent years by Vietnam Airlines In hope that this project can give solutions to apply for VNA in the future to bring VNA to the new stages up to 2015

Let’s go the details below:

CHAPTER I

INTRODUCTION

1.1 Overview of Vietnam Airlines Corporation

Vietnam Airlines Corporation is the State Corporation under the model of the Corporation 91 that was established under the Decision No 328/TT dated May 27th, 1995 of the Prime Minister, operated under the Charter of organizing and operating of the Corporation as approved by the Government under the Decree No 04/CP dated January 27th, 1996 The establishment of the Corporation is to create a strong economic corporation in the system of the State’s Enterprises, preferentially concentrate on sources to implement economic – social missions well, to increase the effectiveness and the international competitive performance

The Vietnam Airlines Corporation is named Vietnam Airlines (VNA) as the core enterprise The Corporation has 20 member units (including 11 units of independently entering in the accounts, 7 units of dependently entering in the accounts, 2 enterprises); VNA’s capital is in a joint-stock company and five joint – venture companies Each unit has specific functions and mainly is to supply products, services for trading airline transport Is one of the member belonging to the Corporation, Vietnam Airlines is the key unit, gradually strengthen and becomes the key enterprise in the strategies of developing business of our country Main functions of Vietnam Airlines are to operate, trade airline transport (transport of passengers, baggage, goods and package) Nowadays, Vietnam Airlines has been expanding the airline networks to 28 domestic places and 38 international places at Asia, Australia, Europe and America

1.2 Problems should be solved

Now the need of transporting cargoes in general and the need of transporting by airline is very large However, the capacity of exploiting the cargoes transport of Vietnam Airlines is limited during recent years It should be privatized in the future

1.3 The project’s objectives

To re-evaluate the operational processes of cargoes transport of Vietnam Airlines during recent years to see the strengths, weaknesses, opportunities and threats to propose solutions to expand the market for cargoes transport of VNA to aim at the objectives to 2015

1.4 Research’s method of the project

The author uses the methods of collecting material, information related to the operations of trading cargoes transport of VNA during recent years to have secondary information Concurrently the author also investigates, applies the expert methods

1.5 Application’s scope

By evaluating, we will give these solutions to apply to VNA in the future Especially in the field of cargoes transport, this is the field that there are much potential for VNA to exploit during recent years, however, VNA has not taken these advantages

of developing the business services of cargoes transport to the new stage, on December 13, 1994; the General Director issued the Decision to establish the Cargoes Marketing Board, which is the advisory board to the General Director to manage the service business of the cargo transport for Vietnam Airlines Now it is called as the Cargoes Planning and Marketing Department belonging to the commercial division of the Vietnam Airlines Corporation (Table 13 – Appendix )

2.2 Analysis of the internal environment related to activities of the cargo transport of Vietnam Airlines

2.2.1 The internal sources, we will analyze following sources:

+ Natural sources: with the available warehouses and equipment serving for handling internal and external warehouse cargoes, mainly concentrating on large airports: NBA, SGN, DAD However, these warehouse systems are downgraded, temporarily constructed (only a warehouse of TSC in SGN is rather modern; Routing network of VNA was constructed by the model of “horizontal axis” mainly

concentrated on NBA,SGN,DAD to create advantages for VNA to compete with other airlines in exploiting cargoes that are in and out transported to Indochina and Asian area However, to the area of Europe, North America, and Australia… the exploitation performance of VNA is limited due to influences of exploitation and strong competition of other airlines

+ Material sources: The number of aircrafts that VNA actually owns is only 20 (4 Boeings 777, 6 Airbuses A321, 8 ATR72, 2 Fokker70) by 45 (25 aircrafts are rent) and there are no cargo aircrafts ( Table 3 – Appendix ); Material facilities for ensuring the exploitation, maintenance of aircrafts and equipment are mainly concentrated on 2 enterprises of repairing aircrafts of A76 in NBA and A75 in TSN,

2 these enterprises have closed relationships with Boeing, Airbus, Fokker by sponsorship contracts, contract of buying aircrafts…; to financial sector; the potential of VNA is very limited in comparison to the need of investing assets to business Due to the ownership, capital is low, the loanable is high and the abilities

of payment the loan interest are low ( Table 6 – Appendix ) In addition, from

2005-2006 up to now, due to influence of objective reasons: disease, war, terrorism and especially the petroleum price is increasing… it directly impacts to the sales of VNA

+ Human resources: employees of VNA up to December 2006 are 10.078 ( Table 7 – Appendix ), in which the specialized employees of the airlines sector have strict requirements of profession, foreign language… from recruitment Every year, staffs are trained to update new knowledge, refresh professional knowledge It is required to achieve certificates, degrees of VNA, IATA to continue working

+ Management organization: The organizational model and management structure are constructed under the on line model allow the management board on line impact and approach to equivalent levels by on line function However, this structure causes to the situation that the information is slowly solved and updated; the effectiveness, flexibility of handling and coping with extraordinary situations are poor ( Table 13 – Appendix )

2.2.2 Operational analysis of the cargoes transport of Vietnam Airlines

Analysis of the cargoes transport activities of Vietnam Airlines, we concentrate on analyzing, assessing following factors:

+ The output of the cargoes business and the annual growth rate of VNA; based on the Table 8 & 9 - Appendix, we see the output of the cargoes transport on the international airlines always occupies high density during years, the market share of VNA in exploiting the domestic cargoes always predominates (due to only

VN and BL exploit) ( Table 1 – Appendix ); moreover, the growth rate is continuous from 2003-2006, it proves the satisfactory signals

+ Organization and operations of the VNA marketing: The service quality is not high, from booking the space to delivering, sending cargoes, sometimes passengers tells the bad behavior, late delivery, prolix procedures, cargoes defects….; the price policies are not flexible, especially the applied rate for domestic flights (because VNA largely occupies the market share) To international flights , VNA applies the policies are more flexible under the rule of supply and demand to attract passengers, however VNA has to face with severe competition from large competitors as: AF,SQ,BR,CI ; the distributive activities of VNA during recent years have been opening the cargoes agents in the domestic market, sign contracts with assigned agents to exploit in the foreign market together with constructing customers’ programs regularly: priority to book spaces, ensure the loading capacity to supply, policies of price discount…

Policies of analyzing the human resources and activities of the cargoes transport are specified by following matrix:

Strengths (S-Strengths):

1 Advantages of exploiting the domestic cargoes

2 The wide domestic and international network of distributing products under agent models

3 The high growth rate in the cargoes transport during recent years proves VNA affirm its brand name on the market

4 The wide objective market due to the Airlines network always open to other areas in the world

5 The quality of human resources is not high, it should be invested more to train good management staffs, skilled cargoes staffs and technical staffs

4 The service quality cargoes transport is not fully paid attention to make the customers reduce, it means that the enterprise’s competition is reduced as well

5 There is no satisfactory investment to research the market and marketing’s strategy causes the enterprise is not able to accommodate to changes of the market’s demands

6 The organizational structure is not appropriate, it needs adjusting to be neat

to increase the flexibility and effectiveness to the enterprise

Comments:

By assessing the internal atmosphere of the enterprise, I realize the internal source

of Vietnam Airlines is weak; VNA does not exploit the strengths and fails to overcome its existing weaknesses in the cargoes business activities in the potential market of the exploitation potentials

2.3 Analysis of the external atmosphere impacts to the cargoes transport of Vietnam Airlines

2.3.1 Macro environmental factor: we evaluate by 5 factors impacts to the macro environment

+ Economic factors: Business activities of VNA during recent years are largely influenced by changed factors of the economy: GDP, inflation rate, the scare situation of the raw material According to Vietnam Government, the intended rate

of economic growth and GDP in 2007 will be reached at 8% due to the increase of the large investment and Vietnam already joined into WTO, the prospect of increasing the needs of the cargoes transport will positively affect to VNA in the future

+ Social – political factors: the politics is stable, the investment environment, and gradual completion of the laws (in December 2005, the National Assembly modified the airline law) in the flexible direction, gradually leaves the protections

It requires VNA to self-affirm its brand name in the future

+ Natural, Social, Inhabitant factors: with the position as the gateway of Asian, it is very advantage to connect airline axis to go to America, Europe, Asian areas; the weather is advantage, the feature of VNA is to establish the airline axis of HAN-SGN to bring large profits to VNA

+ Technological and Scientific, Technical factors: the particular features of the airline are to highly require the safety, convenient factors… VNA always considers

to invest (hire, buy), upgrade equipment to have the most modern exploitation equipment to increase the services’ quality at the highest rate

2.3.2 Micro environmental factors

+ Competitors: at the current domestic market, VNA almost occupies the largest rate, however, at the international market, VNA must be severely competed with large competitors of the finance, exploited loading capacity, experience, technology… as CI, BR, CX, SQ ( Table 2 – Appendix )

+ Replaced products: In the near future years, Vietnam Government has the project

to upgrade the North – Southern railway to shorten the time for the train from SGN

to HAN , in addition to investing to upgrade roads, highway 1A All actions threats to the market share of the cargoes transport of VNA, especially the domestic market share

+ Customers: mainly are agents and freight forwarding companies; these companies distribute to 90% of the sales of the cargoes transport, direct customers (single consignment) only occupy to 10%

On basics of analyzing the external atmosphere to the operations of the cargo transport of Vietnam Airlines to take out risks and challenges to the enterprise, it gives basics to have the strategies and solutions to apply opportunities and overcome threaten risks to the business activities of the enterprise as follows:

3 The ability of approving to increase the freight by the Government

4 VNA is increasing the supply loading capacity on airline axis (SGNHAN, SGNDAD, SGNHPH etc.)

5 The support from the State of the policies and finances to Vietnam Airlines takes advantages to increase construct the market share in the objective markets; to reduce the competitive pressure from external competitors

6 The stability of the politics, society makes the stability of the business policies of Vietnam Airlines

7 The globalization tendency makes to increase the exploitation reserves of cargoes among countries

8 Application of technology, sciences into exploiting processes is the important factor to increase the quality, economic effectiveness as well as the competitive advantages of the products of airline transport of Vietnam Airlines

9 At the first stage, it uses methods to attract domestic customers in the Vietnam market

Threats (T):

1 The system of the airline laws are adjusted in the direction of limiting the protection of the State to Vietnam Airlines and to issue licenses for new airlines

2 The globalization tendency is synonym to the increase of the potential competitors

3 The severe competition in the market cargo of the current international transport as facing with competitors: China Airlines, Eva-Air and some other airlines, which are exploiting in Vietnam

4 The increase of the numbers and quality of other transport means that is able

to replace the airline transport in the future

3.1.1 Prediction of the market of the cargo transport

With the advantage of the natural sources from establishment and the support from the Government, the objective market of Vietnam Airlines is determined by the priority of the in and out transaction cargoes to Vietnam The international and domestic cargoes transport in the Northern Authority Airport (NAA), Middle Authority Airport (MAA) and the Southern Authority Airport (SAA), in which, three international terminals are Tan Son Nhat, Da Nang and Noi Bai take the leading roles

From the data of the Table 12 - Appendix, It is predicted that the market cargo transport by airlines at Vietnam market in the period of 2006-2020 suitable to “The development strategy of Vietnam Civil Airlines Sector 2005-2010 and its direction

to 2020” shows:

- Cargoes output carried on the airline market is very large, the number is suddenly increased due to the policies of attracting the sources of the investment

capitals into Vietnam by the Government and the commit to open the market of exchanging cargoes in the AFTA, WTO ,… It shows that the current loading capacity of the fleet of Vietnam Airlines does not meet the increasing demands of the cargo transport by the airlines of the market It needs to upgrade the current fleet and must specially pay attention to establish the cargo aircrafts to ensure the maximum exploitation of the exchanged cargoes of the market

- The growth rate of the international cargoes transport is evenly increased from 2007 to 2010 with the average rate of 17,1%/year ( Table 12 – Appendix ) It shows that this is the high rate giving the p1otential market

3.1.2 The increase’s objectives, targets of the cargo transport of the Vietnam Airlines Corporation to 2015

3.1.2.1 Objectives

At the Party Committee Meeting of Vietnam Airlines Corporation aiming at the Whole National Delegate Meeting X of the Party in 2005, The Meeting gave the development objectives, orientation for Vietnam Airlines as follows:

“ …, fast modernize, own the new technologies, concentrate on and increase the business effectiveness, enhance the Vietnam Airlines’ position to become a large airline to be a leading airline in the are of the service quality and business effectiveness serving for the missions of industrialization, modernization of the country,…”

However, due to the business sector of the current cargo transport is still weak within the whole business activities of Vietnam Airlines, so it only gives the target:

“… concurrently establishment of the airlines, fleet to ensure the volume of the cargo transport to reach at the sales and productivity of commercial exploitation equivalent to the size of the average airline in the area,…”

3.1.2.2 The increase’s targets of the cargo transport of Vietnam Civil Airlines sector

However, to the business sector of the cargo transport, from the analysis of the internal environment and external environment in Chapter II together with predicable data and objectives of Vietnam Airlines as given, we have main targets

to develop the business sector of the cargo transport of Vietnam Airlines up to 2015

as follows:

¬ To try to keep the stability of the market share of the domestic cargo transport of Vietnam Airlines (91% as at the moment), especially as facing with changes of opening the sky of the Government, after 2008 the market share will keep the rate of 50 -70% of the domestic the market share

¬ To increase the rate of the market share of the cargo transport of Vietnam Airlines on international flights to reach at 40-50% of the market share of the cargo transport by airlines to in and out Vietnam

¬ To develop the fleet with the large and modern loading capacity, to invest more to cargo aircrafts to ensure the competent of exploiting equivalent to other size of the area airlines as Thai Airways, Eva-Air, China Airlines to achieve the numbers and types as follows: passenger aircrafts: 47 including

24 middle - short ranges (150 seats), 10 middle ranges (250 seats), 4 middle - far range (330 seats) and 9 far ranges (330 seats) and invest more 3 cargo aircrafts

¬ The cargoes output exploited must ensure to the target diagram of the output

as follows: ( Table 5 – Appendix )

¬ To increase the performance of serving the infrastructure in exploiting cargoes and supporting services at airports: the warehouse systems for services and cargoes storage, the specialized means system, the system of booking network, the internal information system, the system of seeking lost cargoes, supporting services for passengers to send and receive cargoes…

3.2 Some solutions

3.2.1 Establishment of the solutions by analyzing the matrix SWOT

Matrix of the weaknesses – strengths, opportunities - threats (SWOT) is the important co-operative tool to help managers to develop four solution groups for the enterprise as follows:

o Strength solutions - opportunities (SO)

o Strength solutions – threats (ST)

o Weakness solutions - opportunities (WO)

o Weakness solutions – threats (WT)

The co-ordination of the important internal and external factors is the most difficult missions of the development of a matrix SWOT, it requires having good judgments and there will not have the best combination To establish these solutions, we base

on the matrix SWOT to have basics for giving solutions for the situations of the business activities of the cargo transport of Vietnam Airlines

3.2.2 According to my subjective assessment and exchanges with

experts in the airline sector, we would like to choose some solutions

with the high feasibility to expand the cargoes market of Vietnam

2 Vietnam became the official member of WTO, is receiving the second investment wave, the capacity of cargoes transport by Vietnam market will be increased

3 The stability of politics – society

4 The globalization tendency makes the increase of exploiting reserves of the cargoes among countries

5 The application of technology, science to exploitation processes

is the important factor

THREATS(T)

1 The system of the airline laws are adjusted in the direction of limiting the protection of the State

to Vietnam Airlines

2 The global tendency makes the potential competitors increase

3 The severe competition

in the market of the cargo transport as facing with competitors

4 The increase of numbers and quality of the transport types to replace the products, services of the cargo transport by airlines

T to increase the quality

6 At the first stage, it uses methods to attract customers of Vietnam

market

STRENGTHS (S)

1 Advantages in exploiting

domestic cargoes

2 The distributive network of

the products under the wide

domestic and international

agent models

3 The high growth rate in

cargoes transport, gradually

affirm its brand name on

the market

4 The objective market is

wide thanks to the system

of the airlines network that

is always expanded to areas

in the world

5 The quality of human

resources is not high

COORDINATION OF S/O

S1,2,3,4,5 + O1,2,3,4,5,6

Solutions to uphold the strengths of the domestic market of the cargo transport and open the international market

S2,3,4,5 + O1,2,3,4,5,6

Solutions to expand the size of numbers and the fleet’s performance and cargo aircrafts to compete

on the market

COORDINATION OF S/T

WEAKNESSES (W)

1 Financial source of

Vietnam Airlines is not

strong enough, it largely

COMBINATION OF W/O

W2,3,4 + O5,6

Solutions to increase the

COMBINATION OF W/T

W1,2,3,4,5,6 + T1,2,3

Solutions to create

depends on the

Government, and the

capital structure is not

balanced

2 The number of the fleet is

small, lack of the cargo

aircrafts compared to the

competitors

3 The infrastructure for the

cargoes transport is not

synchronous and the

number is lack because the

enterprise is not

satisfactorily invested

4 The service quality of the

cargoes transport is not

fully concentrated on,

making the decrease of

customers; it means that it

will reduce the

competition

5 It does not satisfactorily

invest to the marketing

field; it does not suitable to

the market’s changes to

meet demands of sending

W5 + O1,3,4,5,6

Solutions to invest, upgrade the marketing system in the enterprise to improve the service quality and increase the market share of exploiting the cargoes transport

financial source to overcome the deficient situations of investment capital for business activities of the enterprise

W1,2,3,4,5 + T1,2,3,4 Solutions to expand the alliance, association with other airlines (the exploited routes, usage of the fleet) and multi- modal freight forwarding agents

3.2.2.1 Solutions to expand the size of numbers and competence of the fleet and cargo aircrafts to compete on the market (S2,3,4,5 + O1,2,,3,4,5,6)

̇ To the domestic market, we may take advantages of the short range fleet (ATR72, Fokker 70)/ middle range (Airbus 320, Airbus 321)/ far – middle range (Boeing 767, Boeing 777) as currently exploited to transport passengers

to combine with carrying cargoes from and to domestic locals to save costs of buying or hiring new planes

̇ To the international market, due to the demands of the cargoes transport by the airlines areas as predicted ( Table 12 - Appendix ) reach at rather high rate together with the prediction of the demands of the cargoes transport at the objective markets : Northeast Asia, ASEAN, EU, North America,… Vietnam Airlines, in addition to take full advantages of the middle range and far-middle range fleet combining between passengers and cargoes transport, should invest to buy or hire middle/far-middle range fleet by the numbers as required for each stage of exploiting passengers together with exploiting to carry cargoes on such above markets ; concurrently (hire or buy) at least 3-5 middle/ far – middle range cargo aircrafts with the loading capacity from 15-

20 tons to meet carried cargo flow that is intended to increase from 2008 to

2015 the advantages of the cargo aircraft are able to carry the cargoes with large quantity and volume and do not depend on the passenger capacity and luggage as the current passenger airlines to help Vietnam Airlines to have more positive before requirements of increasing the capacity of loading capacity and size capacity to carry of the current fleet However, the investment to buy, hire aircrafts should carefully calculate to the seasonal factors in business It should rationalize the loading capacity to carry in the low seasons to avoid the overloading capacity supply, it concurrently may hire aircrafts in the high season

̇ As investing to increase the number of aircrafts (hire or buy) it should pay attention to the factors of saving fuel and range of exploiting (height as flying)

before large changes of the market of the current petroleum price as well as demands of saving capitals for the initial investment items of Vietnam Airlines

3.2.2.2 Solutions used price’s policies of the products to increase the competitive competence (S1,2,3,4 + T1,2,3,4)

̇ Vietnam Airlines is applying for following ticket’s price:

̇ Announced price: is the highest price for passengers who singly send cargoes

̇ Agent price: is applied for agents (equivalent to 90-95% the announced price)

̇ Special price: is applied for the low reasons, promotion,… of airlines (over or equivalent to 80% of the announced price)

̇ Vietnam Airlines applies different prices for consignments with various weight based on the basics of “ The more the consignment weight, the less the fee ”, it helps to encourage customers to send their goods with large numbers

̇ Price’s policies must be flexible before changes of the market and the competitors, especially it must pay attention to the price’s policies of competitors as Pacific Airlines, Eva-Air, China Airlines… from these basics

to adjust the price to be suitable to each stage to have the competitive price and be able to attract customers at domestic and international markets

̇ To have the preferential policies of the freight flexibility to large customers as : authorized agents of Vietnam Airlines, freight forwarding agents (agent to gather cargoes), logistics enterprises, multi-modal transport enterprises or regular passengers who directly send cargoes,… In the event these subjects reach at the output as given by the targets, they will be received the more preferential price from carriers to increase the market share and attract the maximum cargoes before other competitors

̇ The attached sale price is applied to exploitation routes that Vietnam Airlines have high output (route A), it should sell with the supporting price to