Vietjet AIR Managerial Analysis - Alpha Memes [ Group Assignment] PDF

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This us our Group assignment for MGT103 in Spring 2021....

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Hồ Chí Minh, ngày 22 tháng 03 năm 2021

Group Assignment FPT University Course: MGT103 __________________________

Vietjet Air Corporation Member information

Student Code

Full Name

SS160071

Trương Nguyễn Nhật Vĩnh

SS160063

Nguyễn Gia Bảo

SS160106

Trần Trân

SS160046

Trần Chính Phát

SS160645

Nguyễn Trịnh Minh Khôi

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I.

Introduction about the history of the organization/corporation and aspects

related to their managerial functions. -

Vietjet Aviation Joint Stock Company is the first private airline in Vietnam. Not only air transportation, Vietjet also provides goods and services consumption needs through e-commerce technology applications. Vietjet is an official member of the International Air Transport Association (IATA) with the Operational Safety Certificate (IOSA).

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Vietjet is ranked among the highest in the world with 7 stars by AirlineRatings.com, a prestigious organization specializing in assessing the safety and products of global airlines. Meanwhile, AirlineRating also awarded Vietjet with the award "Best Low-Cost Airline 2018 2019". According to Airfinance Journal, Vietjet is in the top 50 global airlines in terms of operation and financial health in 2018.

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Vietjet Air is one of the main three airlines of Vietnam, operating with the slogan: “Save More, Fly More.” Customers can totally trust because this famous airline is in the top 20 of leading brands in 2015 and gets the most precious prize awarded by the Government. Vietjet Air has extensive global network flight for domestic and international tourists. History:

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VietJet Air was established from 3 main shareholders, T&C Group, Sovico Holdings and HDBank with an initial charter capital of VND 600 billion (equivalent to USD 37.5 million at the time of capital contribution). The airline was approved by the Minister of Finance of Vietnam in November 2007 and became the fourth airline in Vietnam, behind only Vietnam Airlines, Jetstar Pacific, and Air Service Flight Company (VASCO) and is the first private airline in Vietnam.

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According to the original plan, VietJet Air planned to officially go into operation at the end of 2008, but due to fluctuations causing the price of gasoline and oil to soar, VietJetAir decided to postpone it until November 2009. At the end of April 2009, Sovico Holdings acquired all of the shares of T&C Group and became the largest shareholder, owning 70% of VietJetAir's shares.

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In February 2010, Air Asia acquired a 30% stake in VietJetAir. Air Asia is another low-cost airline based in Kuala Lumpur, Malaysia, specializes in providing domestic and international flights and is Asia's leading low-cost airline.

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In May 2011, Mr. Tran Minh Trung, nephew of Mrs. Nguyen Thi Phuong Thao, acquired 90% of VietJetAir's shares and transferred control to Mrs. Thao. Therefore, Mrs. Thao continued to hold her position CEO VietJetAir until now. Mr. Tran Minh Trung is a famous young businessman in the South, Head of Communication and Events Department of Topica Group in the South.

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II.

The Organization’s Environment. A. GENERAL: 1. Economic Dimension:

Vietnam is the country with the fastest urbanization rate in Southeast Asia (about 3.4% / year). As of 2015, the number of urban areas increased from 420 (1995) to 775 areas and the total urban area also doubled from 836,117 to 1,642,420. The transportation between urban and rural areas creates demand for air travel between provinces in Vietnam. Data from CAPA shows that the domestic passenger air transport market in Vietnam has increased from 12 million passengers in 2012 to 28 million passengers in 2016, equivalent to a compound growth rate (CAGR) of 23.6. %/year. Vietnam is considered a country with a lower level of economic development compared to other economies in the region. Therefore, Vietnam is expected to have better growth potential. Vietnam's economy in recent years has made great progress. The Vietnamese economy is changing its appearance, infrastructure has been upgraded, investment has increased. With the speed of economic development, the demand of people has also increased, including the need for travel. High-income earners have an increasing demand for air travel. 2. The Policy and Legal dimension: The ASEAN Open Skies (ASEAN Open Skies), which aims to work towards ASEAN

aviation

market,

has been

approved since 2016. The agreement is an important element for the region's aviation industry. Eliminating the majority of barriers on the number of routes and flight frequencies between international airports in ASEAN countries. Specifically, the " removes the 3rd, 4th, and 5th commercial rights restrictions for airlines designated by the signatory and ASEAN member states.

IATA and Bloomberg believe that competition in Vietnam's aviation industry will increase, but at the same time airlines will also benefit from the increased number of passengers due to more flexible flights between regions. In particular, the low-cost airlines in the region will benefit the most from this agreement thanks to the short flight distance (within 3-4 hours) and increased pressure on traditional airlines. B. TASK: 1. Competitors:

The Civil Aviation Authority of Vietnam was born in 1956. However, it has just developed for about 10 years. Up to now, Vietnam's aviation market has the participation of nearly 70 foreign airlines from 25 countries and territories, 5 domestic airlines: Vietnam Airlines, Vietjet, Jetstar, Bamboo and Vasco. Data from the Civil Aviation Administration of Vietnam shows that the number of aircraft has increased from 60 in 2008 to 221 in 2019. Domestic market share, Vietjet accounts for the largest market share with 41.7%, followed by Vietnam Airlines with 36.3%, Jetstar with 13.7%, Bamboo with 6.5%, and Vasco with 1.8%. 2.

Suppliers:

Selection of the most modern aircraft Boeing 737 MAX 200, Airbus A321, Airbus A320, and A320 neo are Vietjet Airs' advantage over competitors in its ability to fly long distances, save energy, safety, and the new fleet of aircraft is always attractive for a better experience. for customers' options. 5

C. INTERNAL 1. Mission: -

Effectively exploit and develop the domestic, regional and international flight network

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Offer customers breakthrough in aviation services.

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Make aviation services a popular means of transportation in Vietnam and internationally.

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Bring joy and satisfaction to customers with luxurious, outstanding service and friendly smiles.

2. Vision: Vietjet Air strives to become a multinational aviation group with a wide network in the region and the world, developing not only aviation services but also providing consumer goods on e-commerce platforms, brand loved and trusted by customers. 3. Slogan: “Save more, Fly more” 4. Business Model: Business to Consumer Vietjet is based on the low-cost airline business model with specific features such as point-to-point flight, focusing on operating short-haul routes with high frequency, focusing on cost control and web-based distribution channel. To create a difference in the quality of products and services provided to customers, Vietjet continuously makes innovation and has succeeded in building a New Age Airline model: low cost but with superior service quality to meet 4.0 industrial standard and serve the needs of diverse customers.

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III.

Organization Structure and Design Analysis and Organization Change and

Innovation 1. Board of Directors:

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Madame NGUYEN THANH HA - Chairwoman

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Madame NGUYEN THI PHUONG THAO - Vice Chairwoman and CEO

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Dr. NGUYEN THANH HUNG - Vice Chairman

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Mr. LUU DUC KHANH - Managing Director

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Mr. DINH VIET PHUONG - Vice President in charge of Business Development

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Mr. DONAL JOSEPH BOYLAN - Independent member of the BOD

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Mr. CHU VIET CUONG - Chairman of the Insurance Committee

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2. Organization Structure and Design:

Function of some Department: ●

Internal Control: is responsible for -

Figuring out risk management policies, processes and programs at the Company,

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Building indices related to the business operations of the Company.

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Reporting on units needing to be recovered and track the recovery.

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Advising BOD on the approval of appropriate policies and orientations relating to the management of risks

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Safety, Security, Quality & Assurance Departure: -

Ensure that the aircrafts are maintained periodically and meet flight safety standards

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Strictly manage the implementation of the plan.

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Manage safety issues related to weather factors.

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Effectively use quality management, data analysis and safety management systems to ensure proactive safety.

3. Organization Change and Innovation: Vietjet strives for market change in online trading Following the trend of cashless payment, Vietjet acted as the pioneer in online trading in the Vietnam market and has successfully changed the customer’s behaviour through years. Before Vietjet’s entry into the market, the online flying-ticket buying rate in Vietnam was just below 8%, and online payment was much less. Now, this cashless figure has occupied 99% of Vietjet revenues. In 2019, the total cashless revenue of the whole system of Vietjet reached 2.5 billion USD, an increase of 25% compared to 2018.

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Vietjet has continuously developed online payment systems for customers through credit cards such as Visa, Master, JCB, Amex, domestic debit card, E-banking, connecting with more than 40 banks in Vietnam and other countries. Besides, Vietjet also launched many attractive and regular promotions. For example, with the program "12 pm, It's time to Vietjet", customers who visit Vietjet's website to buy tickets and pay online right away will get a lot of promotional tickets. Vietjet have greatly contributed to form customer habit of online buying and online payment keep Vietnam catch up with international market. Deputy General Director of VietjetAir Nguyen Thi Thuy Binh has commented on the seminar "Cashless Society”: “Vietjet not only changes people's perceptions and air travel habits but also changes customers' consumption behaviours, striving to act as a "catalyst for market change".”

IV.

Human Resource Management and Recruitment/Training functions in the

Organization 1. Human Resource Management Vietjet always focuses on the human resource development force, in which humans are the key companion along with the development and strength of the Company. Equal remuneration policy is appropriate and is constantly being improved, Vietjet has been creating a good working

environment, healthy and professional for workers as well as increasingly attracting quality human resources high at home and abroad. Vietjet employees in addition to guaranteed basic welfare regimes such as insurance, Tet holidays and appropriate annual leave, salary increase accordingly periodically, consider rewarding KPI every 6 months ... still enjoy policies that show public concern to employees as free flight ticket policy fees for employees and relatives (SFC program), the networking and team building activities … 9

Total number of employees of Vietjet as of December 31, 2019 is 5,092 employees, up 29.3% compared to 2018. During the year, Vietjet was recruiting 1,154 new personnel including 284 pilots, 861 continued staff and other personnel at the Director, manager and personnel levels staff at the same time developing internal human resources through the appointment of 78 new titles. Percentage of foreign workers accounts for nearly 22% of the total at Vietjet, up to 79% are Vietnamese. These are the teams of pilots, flight attendants and other experts with extensive experience in the same fields participate in working, collaborating and learning in the environment Vietjet, creating diversity in nationality, culture, and bronze time is a human resource to be focused on developing share and develop knowledge, skills and experience, contribute positively to rapid and sustainable development of the Firm. High-quality labor for the air transport industry, especially skilled pilots and technicians are very lacking and highly competitive in the country and the country the labour force leads to job-hopping. So, to avoid the shortage of manpower, Vietjet organized deployed a series of solutions to increase efficiency results of human resource management including construction and perfecting mechanisms and policies for remuneration, evaluation and rewarding employees, implementing the standardization recruitment process, training, transfer, appointment, performance assessment, according to market principles and weight using talented people.

In order to build human resources to meet strategic tasks and anticipate opportunities, Vietjet has proactively planned human resources at all levels through recruitment, training, policy and remuneration, and promotion. spiritual and material life for all staff in order to create a healthy and professional working environment for employees, attracting high quality human resources at home and abroad. Vietjet also actively implements professional training programs and practical programs to improve management experience and build partnerships with high-quality universities such as Ho Chi Minh City University of Technology. Ho Chi Minh City, Hanoi University of Science and Technology, 10

Vietnam Aviation Academy aims to actively recruit human resources who have graduated from these universities. and skilled technicians are in short supply and highly competitive domestically and internationally, leading to job hopping. The average rate of employees quitting their jobs at Vietjet has not been high in recent years. Vietjet pays special attention to promoting diversity and equality of opportunities during its operations, in which female employees are always interested and encouraged to improve their qualifications in completing tasks. In the workforce structure, the proportion of female employees accounts for 37.5% (an increase of nearly 4% compared to 2018), and women also account for 34% (an increase of nearly 5% compared to 2018) in the management team. VietjVietjet's executives pay special attention to promoting the diversity and equality of opportunities in the process, in which female employees are always interested, encouraged to improve their skills in completing tasks. In the workforce structure, the proportion of female employees accounts for 37.5% (an increase of nearly 4% compared to 2018), and women also account for 34% (an increase of nearly 5% compared to 2018) in the management team of Vietjet.

Vietjet also implements activities to ensure a fair and non-discriminatory working environment, all employees have the opportunity to promote regardless of gender, starting point, social class, etc. regions. Salary, bonus and remuneration are based on performance at work to help motivate employees to maximize their capacity. 2. Recruitment/Training Function

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Training is an important policy to help improve the quality of human resources, and is one of Vietjet's priority policies for employees, meeting the development needs of the Company and the career orientation of employees. In 2019, Vietjet trained more than 93,000 hours for pilots, 344,000 hours for flight attendants, 125,000 hours for technical staff and more than 100,000 hours for Vietjet staff. Vietjet continues to expand and upgrade the form of online training, which is considered effective, saving time and costs with 544 courses, training 19,936 trainees, reaching the rate of 59%. In addition, on the occasion of signing a contract to order 20 new A321neo ACF aircraft on October 31st, Vietjet signed to invest in 2 more simulated cockpit training for pilots, engineers ..., for the line aircraft A320 / A321, bringing the total to 3 simulated cockpits invested by Airbus for Vietjet's Academy and helping the airline increase on-site training productivity as well as training for third parties in the near future. support from Airbus, Vietjet provides the most advanced training solutions to ensure safety, reliability and operational efficiency throughout the life cycle of aircraft lines. Airbus will also support Vietjet through many comprehensive and detailed training programs for pilots, apprentices, flight attendants, operating engineers, and aircraft maintenance and repair specialists. Training is an important policy to improve the quality of human resources and is one of Vietjet's priority policies for employees, meeting the development needs of the Company and its employees, specifically: · Ensuring stable employment for employees; · Career orientation & promotion opportunities expansion future careers of employees at the Company; · Give employees peace of mind, trust, and long-term commitment with work; · Motivating employees to improve productivity, job and labor quality. The goal of the training is to ensure that human resources with professional qualifications and skills meet the requirements of the aviation industry and are associated with the Vietjet Development Strategy to ensure stable jobs for employees. , improving the stability and quality of the workforce according to the standards of their current titles. In 2019, Vietjet organized 1,327 Initial, Periodic, and Level Up training courses for 47,109 times of Vietjet internal trainees, students of member companies, Vietjet's ground service companies, ... . In which, organizing initial basic training courses and providing resources for Vietjet's Operations Division are as follows: · 19 Experienced Pilot Courses with 236 trainees; · 6 new pilot courses (cadet) with 151 students / 6 courses elevating the ranks to 62 captains, · 44 new flight attendant courses with 892 students / 11 courses for 187 the flight attendant. · 3 staff of aircraft maintenance engineering with 87 student · 5 ground staff courses with 71 trainees · 2 staff courses for flight dispatching with 46 trainees · Organized 23 courses "Culture integration of Vietjet" for 1,435 students and 51 courses "Enter aviation industry" for 1,018 new employees of the Company.

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· ICAO English proficiency assessment organization for 149 crew members Completed drafting and editing 102/122 spears professional training process. Vietjet also continued to expand its online training form, which is considered to be effective, time-saving, and cost-effective with 544 courses, training 19,936 students, reaching the rate of 59%. The training and development of teachers is interesting by Vietjet, currently there are 125 full-time and part-time teachers with full training capacity to meet the labor needs of the aviation operation fields. In addition to Vietjet maintaining the approval of qualified organizations to train and train for the Air Force and Ground Service Division, and the training equipment, in November 2019, Vietjet continued to coordinate with Airbus has been successfully approved by the Level 2 Pilot Class 2 Training Organization issued by the Civil Aviation Authority of Vietnam (CAAV) and the European Aviation Safety Agency (EASA), which guarantees pilot training. stable and save cost as well as time.

V.

Operations, Quality, and Productivity Manage...