Midterm report subject basic marketing theme vietjet joint stock company

VIETNAM-KOREA UNIVERSITY OF ICT
FACULTY OF DIGITAL ECONOMY AND E-COMMERCE


MIDTERM REPORT
SUBJECT: BASIC MARKETING
THEME:

VIETJET JOINT STOCK COMPANY
Instructor:

Ngo Hai Quynh

Students:

1. Ho Thi Ngan
2. Pham Xuan Quynh
3. Hoang Hong Ngoc
4. Nguyen Dang Linh Dan

Class:

21GBA – Group Exterminators

Da Nang, April 7, 2022

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VIETNAM-KOREA UNIVERSITY OF ICT
FACULTY OF DIGITAL ECONOMY AND E-COMMERCE

      

MIDTERM REPORT
SUBJECT: BASIC MARKETING

THEME:

VIETJET JOINT STOCK COMPANY
Instructor:

Ngo Hai Quynh

Students:

1. Ho Thi Ngan
2. Pham Xuan Quynh
3. Hoang Hong Ngoc
4. Nguyen Dang Linh Dan

Class:

21GBA – Group Exterminators

Da Nang, April 7, 2022
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PREAMBLE
Building a marketing strategy is an extremely important task of every business in order

to most effectively achieve three main goals: profit, location and safety. In the everexpanding market economy, with increasingly fierce competition, a business that wants to
maintain its strength and development needs to be able to maximize its resources and
manage all its resources. factors to achieve the intended goals. Through marketing
strategies, businesses can take advantage of internal resources, find attractive market
opportunities, improve operational efficiency and improve competitiveness.
In recent years, Vietnam's aviation industry has made great progress in both quantity
and quality. This result is influenced by many factors, in which marketing activities
account for an important but still limited proportion in business activities of enterprises.
This is very remarkable. Because under the current market structure, new suppliers will
flood the market, increasing the level of competition. Aware of this problem and what we
learned in the lecture hall, our team chose VietJet Air as the subject of the mid-term
report.

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TABLE OF CONTENTS
PREAMBLE.............................................................................................................. 1
IMAGE CATEGORIES............................................................................................ 3
PART 1: GENERAL INTRODUCTION TO VIETJET AIR.................................4
1.1. History of formation and development of VietJet Air............................4
1.2. Vision and mission.................................................................................4
1.3. Operational efficiency............................................................................5
1.3.1. Business situation in 2020..............................................................5
1.3.2. Business situation in 2021..............................................................6
PART 2: MICRO-ENVIRONMENTAL ANALYSIS..............................................8
2.1. Suppliers................................................................................................. 8
2.2. Consumers..............................................................................................9
2.3. Competitors............................................................................................. 10
2.3.1. Vietnam Airlines...........................................................................10

2.3.2. Jetstar Pacific Airlines...................................................................11
2.4. Pressure................................................................................................... 11
2.5. Strengths................................................................................................. 12
2.6. Weaknesses.............................................................................................15
2.7. Opportunities and Threats................................................................16
CONCLUDE.............................................................................................................. 18
REFERENCES.......................................................................................................... 19

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IMAGE CATEGORIES
Image 1.1. The business model map................................................................................9
Image 1.2. Total domestic and international market share in Vietnam over the years.....13
Image 1.3. Growth in passenger volume over the years..................................................13
Image 1.4. Net revenue...................................................................................................15

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PART 1: GENERAL INTRODUCTION TO
VIETJET AIR
1. Introduction
Vietjet Aviation Joint Stock Company was established from 03 main shareholders:
T&C Group, Sovico Holdings and Development Joint Stock Commercial Bank Ho Chi
Minh City House (HD Bank) with initial charter capital of 600 billion VND (equivalent
to 37.5 million USD at the time of capital contribution).
The airline was approved by the Minister of Finance for a license in November 2007
and became the 4th airline of Vietnam after Vietnam Airlines, Jetstar Pacific and Vietnam
Aviation Service Company (VASCO). On December 20, 2007, the Minister of Transport

of Vietnam awarded the certificate Air transportation business license for VietJet Air.
1.1. History of formation and development of VietJet Air
November 2007: The airline was established with an initial charter capital of 600
billion VND (equivalent to 37.5 million USD)
December 2007: The airline was officially licensed to operate
December 5, 2011: Opening sale of air tickets for the first time
December 25, 2011: First flight from Ho Chi Minh City, Ho Chi Minh to Hanoi
February 10, 2013: VietJet Air officially opened a route to Bangkok
June 26, 2013: VietJet Air established an airline joint venture in Thailand
October 23, 2014: Honored to receive the Top 10 best airlines in Asia
January 31, 2015: Welcoming the airline's 10 millionth passenger
May 23, 2016: Completed the order for 100 Boeing 737 MAX200 aircraft
November 8, 2017: Witnessing the new operator certificate in Thailand and
announcing the route DaLat - Bangkok
March 16, 2018: VietJet Air announced a plan to open a direct route between Vietnam
and Australia
1.2. Vision and mission
Vision: Vietjet Air builds a vision to become an airline group multinational, has a wide
flight network throughout the region and the world, developing not only aviation
services, but also providing consumer goods on commercial platforms ecommerce, is a
brand loved and trusted by customers.
Mission: Exploiting and developing a wide network of routes in the country and in the
region and international. Bringing a breakthrough in air services. Make goods service

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does not become a popular means of transportation in Vietnam and internationally. Bring
pleasure, satisfaction for customers by superior service, luxury and friendly smile.
Core values: Safe - fun - cheap - on time

During more than 10 years of operation, Vietjet Air has received many awards,
certifications such as: “Top 500 leading brands in Asia 2016”, “A brand Best low-cost
airline in Asia 2015" (voted by TTG Travel Awards), "Airline" favorite airline in
Vietnam" (Economic Times voted).
In addition, for many years in a row, the company has been voted as "Best place to
work" and "Asia's Best Employer Brand". Vietjet Air also received certificates of merit
and emulation flags from the Prime Minister for those who contributed to the airline's
contribution to the domestic aviation industry.
1.3. Operational efficiency
1.3.1. Business situation in 2020
At the end of the fourth quarter of 2020, VietJet achieved a profit after tax of the parent
company of VND 274 billion, consolidated profit after tax of VND 995 billion. For the
whole year of 2020, Vietjet achieved a consolidated after-tax profit of VND 70 billion,
being one of the few airlines in the world that did not lay off employees and operated
profitably in 2020.
VietJet's financial statements also recorded ancillary revenue structure reaching nearly
50%, showing that the airline has increased ancillary services to offset ticket revenue.
According to the report, Vietjet has total assets of 47,036 billion VND, owner's equity
reaches 17,326 billion VND including treasury shares, very low debt/equity ratio, only
0.66 times and liquidity ratio. Current account continues to remain at 1.2 times, a good
level in the world aviation industry.
In 2020, VietJet has converted a number of aircraft configurations into cargo transport,
applying a new mode of operation to enhance the fleet's cargo capacity. The airline is also
the first airline to be approved by the authorities to carry cargo in the cabin. The airline
has transported more than 60,000 tons of goods internationally.
Sales of domestic and foreign goods in the fourth quarter of 2020 increased rapidly,
reaching 75%, the whole year grew by 16%. Through codeshare agreements, Vietjet's
goods have gone to the Americas and Europe - destinations that the airline had only
previously planned.
These results have helped Vietjet to be honored by Air Transport magazine Payload

Asia as "Best Cargo Airline of the Year" and "Low-Cost Airline with Low-Cost Airline
Operations". best merchandise of the year”.

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2020 also marks the commissioning of Vietjet Ground Operations Center (VJGS) at
Noi Bai International Airport. VJGS helps Vietjet improve quality, service, synchronize
brand identity and manage operating costs well.
VietJet has launched products and services to help passengers choose more flexible
journeys such as Power Pass unlimited flights, upgrade with Power Pass Skyboss or more
utilities with Skyboss and Deluxe ticket classes.
VietJet drastically implements cost-saving programs, such as optimizing fleet
operations to reduce costs by 10%, negotiating unit price reductions of 20% - 25% with
suppliers, and cutting operating costs by 10%. In addition, Vietjet successfully
implemented a program to buy and store gasoline, helping to reduce costs by 25%
compared to the market.
VietJet decided to transfer its investment portfolio and some assets accumulated in the
previous time to focus capital, cash and nurture resources to recover when aviation
rebounds.
In 2020, the airline operated 78,462 flights with 120,093 safe flight hours, transporting
more than 15 million passengers. With the thorough application of safety regulations on
epidemic prevention and control of WHO and authorities, in 2020, all Vietjet staff and
passengers will be safe.
VietJet recorded positive results such as seat occupancy rate of over 80%, punctuality
rate of over 90% - the highest rate in the world. VietJet is an airline with technical
reliability of 99.64%, rated 7/7 stars in terms of safety, voted by Airlineratings as the
safest low-cost airline in the world in 2020.
Besides commercial activities, Vietjet participates in many charity activities,
supporting passengers and the community, spreading the spirit of good living and

beautiful living of VietJet people to domestic and international communities.
Entrepreneur Nguyen Thi Phuong Thao, CEO of VietJet, has been honored as one of the
110 most influential people in Asia in charity work.
1.3.2. Business situation in 2021
Recently, VietJet Aviation Joint Stock Company has announced the company's
financial report for the first quarter of 2021. Accordingly, VJC's net revenue reached
VND 4,969 billion, down 60.76% over the same period last year. Meanwhile, COGS in
the period increased to 5,078 billion dong. Doing business below cost, VietJet reported a
gross loss of 108.9 billion dong, while in the same period reported a profit of 1,205
billion dong.
In the second quarter of 2021, the company's revenue from financial activities was the
brightest point. Specifically, the business recorded revenue from financial activities up to
1,174 billion VND, 8.2 times higher than the same period in 2020. Besides, other income

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of VJC also increased sharply, reaching 413 billion VND. VND, 23 times higher than the
same period last year. This is a bright spot in the business activities of the enterprise in
the face of the heavy impact of the Covid-19 pandemic on the entire civil aviation
industry in general.
After deducting expenses, VietJet reported a profit of VND 1,063 billion in the second
quarter of 2021, twice as high as in the same period of 2019. Despite being affected by
the epidemic, VietJet Air's business situation is considered very positive.

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PART 2: MICRO-ENVIRONMENTAL ANALYSIS
2.1. Suppliers

Safran Electronics & Defense provides services and training programs for Vietjet's
technical team, and supports the airline in establishing Vietjet's training and engine repair
and maintenance complex in Vietnam. Especially, Vietjet and Safran will accelerate
cooperation and provide Vietjet with comprehensive and effective flight information
analysis (Flight Data Analysis) solutions.
Cooperation agreement between Vietjet and SR Technics on providing technical
services to the fleet including technical training and supply services, aircraft spare parts
supply and repair, and cooperation plan operate the Aviation Training Academy in
Vietnam of the two sides.
ST Engineering provides Vietjet with a comprehensive set of support solutions for
aircraft equipment maintenance, including equipment supply, repair, overhaul, upgrade,
improvement, and storage of supplies for main maintenance stations, equipment status
tracking and logistics for the airline's entire fleet.
VietJet's ticketing system is managed and developed by Intelisys (Canada). To manage
risk and detect credit fraud and verify internet bookings.
The company uses Gatekeepers software provided by Mastercard. Mastercard is one of
the world's leading credit card service providers, processing more than 30 million
transactions per month for 30,000 companies in 180 countries around the world. Flight
safety analysis operations are managed by the EFB system provided by Airbus. EFP helps
the crew to be updated with information on flight safety and flight management as
quickly as possible.
For operations, Geneva software helps VietJet optimize its resources in terms of flight
schedules, crew schedules, and flight time control. In addition, the company also uses
Sunsystems to manage accounting and finance.
Swiss-AS and its member companies provide Vietjet with services using the platform
of AMOS software on mobile devices, fully automating and digitizing the work of
Vietjet's engineers. In addition, the airline will increase the use and update of AMOS
tasks on automatic planning and aircraft operation scheduling, optimizing maintenance
budget management.
VietJet also signed a comprehensive cooperation agreement with Amadeus - a leading

technology partner in the field of global aviation and tourism. Accordingly, VietJet will
expand its flight network and distribution channel globally and connect with more than
446 other airlines in the same system of Amadeus. Through Amadeus' agent network,

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VietJet will provide information about products, services, and promotions on domestic
and international flights that VietJet is operating.
2.2. Consumers
Vietjet Air has two customer segments: One is the consumer segment who needs to
travel by plane. The second is the business segment, which are companies that have a
need to transport goods by air. Consumer Segment:

Image 1.1. The business model map
Vietjet Air's target customers are those who need to travel long distances with low cost.
They move for family, work or travel reasons. Because the need to save money plays an
important role for this potential customer segment, they are willing to trade off other
needs such as comfort, convenience, good care, etc. The largest group of people with this
need are those with low and middle income. Here Vietjet Air has a very different
customer segment than Vietnam Airlines. Those are people who have little money, before
they did not or very little use Vietnam Airlines because of high ticket prices. Their main
means of transportation are long-distance coaches or trains.

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For this customer segment, cost savings are the most important factor, and they are
willing to trade them for other needs such as food service, entertainment, comfort,
attentive service…

2.3. Competitors
Currently, in the context of the aviation industry market becoming more and more
exciting with the participation of many new airlines, the competition for market share of
domestic airlines is increasingly fierce. At that time, customers will have many choices to
meet their needs and ability to pay. Therefore, factors such as price, service attitude of
staff, flight services, safety and especially punctuality of each flight will lead to
customer’s decisions. Any airline that better captures and understands the psychology of
target customers and meets their wants or needs, is the leading airline in the airline
industry. According to statistics on the market share of Vietnam's aviation industry by the
end of 2019, VietJet Air's two biggest competitors are Vietnam Airlines (accounting for
35.9%) and Jetstar Pacific Airlines (accounting for 13.9%).
2.3.1. Vietnam Airlines
Advantage:
And as you can see Vietnam Airlines is the strongest and most formidable competitor
of VietJet Air. Considered a big player in the aviation industry. Vietnam Airlines is not
only appreciated for its service quality, professionalism and world-class quality, but also
loved for its social activities and community benefits that the airline has carried out since
its inceptioninception active up to now. A few outstanding advantages that help Vietnam
Airlines score points and be the choice of customers such as the extremely professional
service attitude of the staff as well as the flight attendants, a snack service that ensures
quality and hygiene. food on every flight, newspapers for passengers to read to relax and
entertain, or airline tickets always have 20kg of checked baggage,... Moreover, Vietnam
Airlines has a wide flight route. the whole country to tourist destinations and the island
plateau.
Defect:
The ticket price for each flight of Vietnam Airlines is relatively higher than that of
VietJet Air It is also a weakness of Vietnam Airlines, although the target customers it
targets are people with high income, but the average income of people Vietnam is not
high and Vietnamese consumers tend to choose products and services that are affordable,
cheap and have more promotions and incentives.

2.3.2. Jetstar Pacific Airlines
Advantage:
Jetstar Pacific Airlines is a pioneer airline providing low-cost airline services to the
Vietnam market, making the concept of air travel less luxurious, reaching a large number
of high-income customers. average income, not just high-income customers like Vietnam
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Airlines targets. The company also has capital advantages with the participation of
foreign partners. Besides, the system of booking through the website was also first
exploited by Jetstar in Vietnam.
Defect:
The airline's domestic routes are quite small, with only 7 destinations, and the
frequency of flights is not as much as Vietnam Airlines or VietJet Air. In addition, the
frequent delays of flights, unstable flight plans, rumored aircraft of poor quality,
"whatever it's worth"... of Jetstar are also complained a lot by customers in the
newspapers. newspapers or social networking sites.
2.4. Pressure
VietJet Air is the first private airline in Vietnam licensed to fly domestically and
internationally, operating under the low-cost airline model (LowCost Carrier) with the
core product offering criteria transport at lower and more competitive fares than
traditional airlines. With the motto of creating many flight opportunities at low prices,
VietJet Air always focuses on improving the quality of passenger service while ensuring
good cost control through reducing aircraft turnaround time, improving energy efficiency,
and increasing productivity, productivity of each employee in order to optimize operating
costs and return added value to customers. Recently, airlines in general and VietJet Air in
particular have received conflicting information about the quality of air transportation
services due to technical problems with aircraft and the subjectivity of staff air. This had a
significant impact on the airline's business. After that incident, VietJet Air became the
"champion" of delay with 10,235 flights taking off on time, accounting for 17% of the

total number of flights. In the first 6 months of 2018, an increase of 2.6% compared to the
same period in 2017. Leading to a decrease in Vietjet Air's profit and revenue due to the
lack of aircraft sales and re-renting (2018 data) and this It is also a factor that helps vietjet
air be mentioned more and known by many people. When the open trend of the aviation
service supply market is gradually becoming a common trend, it has set requirements for
VietJet Air, isn't it? stop improving the quality of its air transportation services in order to
attract more new customers and create sustainable development. Recognizing the
importance of improving the quality of air transportation services of VietJet Air, it is
imperative to improve the system and overcome the current situation to ensure customer
satisfaction and profit.
The difficulties show that airlines are worried about debt pressure due to the impact of
the COVID-19 epidemic. The outbreak of the pandemic has greatly affected airlines in
general and vietjet air in particular, the busy isolation of people and limited travel
demand, leading to the freezing of the aviation industry, making airlines difficult to
operate Businesses face many difficulties.

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Any airline is currently "hungry" for preferential capital. As VietJet is having to bear
debts to pay during the time it has to stop and reduce the number of flights due to social
distancing; in which, there are payables due to the payment of long-term bonds with high
interest rates. Total overdue debts and short-term loans of VietJet amounted to many
trillions of dong. Since the outbreak of the epidemic until now, the revenue of airlines has
continuously decreased, currently only less than 10-20% compared to before the
epidemic.
2.5. Strengths
Low-cost airline VietJet (VietJet Air) is one of the most profitable businesses in
Vietnam. However, not everything surrounding VietJet Air is rosy. Like every other
corporation, VietJet Air also has fatal weaknesses and challenges that are not easy to

overcome.
The first strength of VietJet is that it has quickly acquired market share in Vietnam one of the fastest growing aviation markets in Asia and the world since the launch of
VietJet (2013). GDP has grown at least 5% per year since VietJet came into operation,
accompanied by a constantly growing income level and the population of the middleincome group. The young middle class is also growing, giving the airline an inexhaustible
source of customers.
Many people have switched from vehicles such as coaches and long-distance trains to
airplanes. From a modest 12 million passengers in 2012, to 2016 the number of
passengers served by Vietnam's aviation industry has increased to 28 million, equivalent
to an annual growth exceeding 30%. And if you include international flights. In fact,
passenger volume more than doubled, from 25 million in 2012 to 52 million in 2016.
From the start-up position, VietJet has risen to the top of the market in a short time - 5
years. At the same scale, it took low-cost carrier Cebu Pacific more than a decade to
overtake Philippines Airlines, and even AirAsia took six years to rise to the top in
Malaysia. In 2016, VietJet had more than 14 million passengers, including about 12
million domestic passengers. VietJet is expected to carry 17 million passengers in the
whole of 2017, carry 25 million passengers in 2018 and reach 30 million in 2019.

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Image 1.2. Total domestic and international market share in VN over the years
In 2016, their domestic market share was on par with Vietnam Airlines, each holding
42%. With an average market like Vietnam (20 million passengers), it's a surprising
achievement for Vietjet to take the lead in just 5 years.

Image 1.3. Growth in passenger volume over the years (millions of people)

VietJet's second strength is one of the cheapest airlines in Asia and the world. In
the first 6 months of 2017, the cost of 1 available seat per 1km (CASK) of the
airline

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was less than 4 cents (9o9 dong), eliminating fuel costs even lower. This is
especially beneficial in Vietnam, which is price sensitive and has low margins.
In the world, there are only a few low-cost airlines with low CSKA like Vietjet
Air: AirAsia, Wizz Air, Ryanair and Cebu Pacific. Low costs have allowed Vietjet
to establish profitability at a very early stage. Vietjet has been profitable since mid2013 and profits have steadily increased since then. (CSKA excluding fuel and
CSKA including Vietjet's fuel.) Vietjet reported pre-tax profit more than doubled in
2016, reaching 2,239 trillion VND (106 million USD). In the first 6 months of
2017, pre-tax profit increased by 45%, reaching 1,907 trillion VND (84 million
USD).
CAPA forecasts that VietJet's costs will continue to decrease in the future because
its large fleet will help improve its advantages of scale and more importantly,
VietJet is adding more wide-ranging aircraft. As the level of competition in the
Vietnamese aviation market becomes more fierce, the scale and low cost of VietJet
will be an important competitive advantage.
Ancillary revenue is an important factor in the success of most low-cost airlines
(LCC). This is also the factor that helped VietJet quickly become profitable. This
source now contributes more than 23% of VietJet's revenue in the first 6 months of
2017. A small number of low-cost public airlines have impressive income thanks to
logistics services accounting for more than 30% of total revenue, but 23% are
children. Very admirable numbers for a fledgling company, especially in Asia. In
the first 6 months of 2017, Vietjet averaged 13.6 USD/pax for logistics services, up
20% over the same period last year.

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Image 1.4. Net revenue

Another strength is that the company has built a strong and well-recognized brand
name in Vietnam thanks to its good communication and distribution network through
local travel agencies, expanding its products or trading platform. e-commerce, social
network with partners like Facebook or Google. This is an important factor because most
Vietnamese people still buy tickets through agents instead of booking directly on the
Internet.
Vietjet is one of the strongest brands in Vietnam. A 2015 study showed that 96% of
Vietnamese people recognize the name Vietjet, and 88% of its customers feel satisfied.
All thanks to good products and clever marketing programs (like the bikini aerial
campaign). Currently, VietJet is building a loyalty program, which will further enhance
their position in the domestic market. In addition, Vietjet also has 1,300 ticket agents
nationwide. Since 2014, Vietjet has stopped paying commissions to agents, paying only a
bonus of 0.3% of total costs. That is one of the reasons why even though Vietjet sells very
cheap air tickets, it still makes a lot of profit.
2.6. Weaknesses
Since the early days, Vietjet has been in discussions with potential partners to form
alliances with other low-cost airlines across Asia. However, VietJet failed in most of the
joint venture negotiations and only succeeded in Thailand. Currently, the company has
not found joint venture partners in other major Asian markets. Vietjet's desire is to
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cooperate with the leading low-cost airlines in Southeast Asia such as AirAsia and Lion,
in order to

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increase its presence and use up nearly 200 aircraft that they have ordered. Some
potential deals cannot come to an end and currently the only joint venture (in Thailand) is

facing many difficulties.
Thai VietJet was born in 2013 but it did not come into operation until September 2016
because of procedural problems. In addition, the initial partner, Thai airline Kan Air, has
sold a majority of shares to a group of Thai investors since early 2015. In the first quarter
of 2016, VietJet also sold shares here to 1 investor. Vietnam, reducing the ownership rate
to only 9%, putting the company in a passive position.
Vietjet is one of the strongest brands in Vietnam. A 2015 study showed that 96% of
Vietnamese people recognize the name Vietjet, and 88% of its customers feel satisfied.
All thanks to good products and clever marketing programs (like the bikini aerial
campaign). Currently, Vietjet is building a loyalty program, which will further enhance
their position in the domestic market. In addition, Vietjet also has 1,300 ticket agents
nationwide. Since 2014, Vietjet has stopped paying commissions to agents, paying only a
bonus of 0.3% of total costs. That is one of the reasons why even though Vietjet sells very
cheap air tickets, it still makes a lot of profit.
The final weakness: most of VietJet's profit comes from sale and leaseback activities.
Since the end of 2014, the airline has signed an agreement with Airbus and has received
28 aircraft ordered from Airbus, sold and leased all of these aircraft.
This is an operation that LCCs often use to make quick profits. However, in the long
term it will turn into a weakness as the airline will end up paying higher than average
rental costs as the life of the aircraft increases.
VietJet is also enjoying the advantage of low maintenance costs because of its new fleet
of aircraft. In the future, the cost of aircraft maintenance and lease may increase, and the
airline faces fiercer competition after expanding its operations in the international market
- a move necessary to be able to use the aircraft. Out of order for 200 planes.
2.7. Opportunities and Threats
Opportunities
VietNam is emerging as a popular tourist destination, the number of visitors surpassed
10 million in 2016, an increase of 26% over the previous year. In the first 9 months of

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2017, the number continued to increase by 30% compared to the same period last year.
This trend is expected to continue. This is an opportunity for VietJet. Currently, the
airline has regular flights to Korea, Taiwan, Malaysia, Thailand and Cambodia. China the largest and fastest growing source of tourists - currently only has a charter route (a
charter flight exclusively for visitors of a travel agency) but will soon have an official
route.
The airline is starting to pursue commercial rights 6 (which is the right to take
passengers, cargo, mail from a second country to a third country through the territory of
the operator's country, for example transporting passengers from Cambodia) to Japan via
Tan Son Nhat airport). If successful, VietJet could open a new growth phase when the
domestic market is saturated. Vietnam's geographical location is very convenient for
transporting passengers from Southeast Asia to Northeast Asia.
VietJet is also looking for forms of cooperation such as issuing inter-airline tickets or
code-sharing with other airlines.
Threats
There are many opportunities but also many challenges. The first is the increasingly
fierce competition environment. Leading Southeast Asian airlines such as AirAsia and
Lion are both planning to set up joint ventures in Vietnam. VietStar – another domestic
carrier – has recently been licensed and plans to start providing services from the end of
this year or early next year.
The Vietnamese market will not be able to support 1 new startup – let alone 2. If
Vietnam AirAsia enters the market and Lion Group can also put Batik Vietnam into
operation, the market could have a "bloodbath".
After growing 20% - 30% in the period 2012-2016, Vietnam's aviation market will
decelerate. Slowing growth in the domestic market will put pressure on VietJet to rely
more on the international market, which is not easy. Besides, the growth of domestic
tourism demand is currently 4-5 times higher than GDP growth, which is an
unsustainable rate.
Like other airlines, the overload at Tan Son Nhat airport will greatly affect the growth

ability of VietJet. With nearly 200 aircraft on order with Airbus, VietJet may face an
oversupply of aircraft if its infrastructure continues to be overloaded and the growth of
the domestic market slows down significantly. The international market has more
potential and was also the focus of VietJet's development in 2017, but this is a much more
fierce market than the domestic market. The Vietnam market can hardly support more
than 100 aircraft.

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The decision to order 100 737 MAX aircraft from Boeing in 2016 surprised many
people because there are 2 types of narrow-body aircraft in the fleet which is unusual for
an LCC of the size of VietJet.

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CONCLUDE
Vietjet Air has many segments with low cost, enough to attract customers and compete
with competitors. Launching at the right time, not afraid to copy competitors' models,
using strategic joint ventures are the distinctive and outstanding features that make Vietjet
Air's strength. Compared to the Philippines and Indonesia, because it is supported by
feeder traffic from other AirAsia branches in the region, Vietjet Air's ability to succeed
and speed is much faster. Is a good choice, should invest.

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