About the number of sellers and buyers

Airlines (airlines) of Vietnam

Overview of Vietnam's airlines
Currently, Vietnam has 4 domestic airlines: Vietnam Airlines, Vietjet Air, Jetstar Pacific and
Bamboo Airways. Vietnam's airlines operate up to 49 domestic routes to major airports in Hanoi,
Da Nang, Nha Trang, Saigon, Da Lat and many international routes to countries in Europe. Asia,
Australia, America, Africa. Each airline has its own advantages and points in terms of service
quality, folding seats as well as promotions, ...
Vietnam Airlines (VNA)
The national flag carrier Vietnam Airlines achieves 4-star standard and is highly appreciated for
its service quality, reputation and has become a companion with attributes of many customers.
Vietnam Airlines was established in 1956 and the first flight took off in September 1956.

- At the moment, Vietnam Airlines operates 5 lines of modern and modern decorated aircraft,
including: Boeing 787, Airbus A330, Airbus A321, Airbus A350. Vietnam Airlines operates
flights to all provinces of the country, including: Hai Phong, Quang Ninh, Van Don, Hanoi,
Vinh, Thanh Hoa, Da Nang, Quy Nhon, Chu Lai, Hue, Pleiku, Buon Me Thuot, Con Dao, Rach
Gia, Da Lat, Tuy Hoa, Nha Trang, Can Tho, Saigon, Ca Mau. Along with international flights to
Bangkok, Seoul, Manila, Singapore, Tokyo, Chicago, Moscow, New York, Amsterdam, etc.
Besides, you can choose Vietnam Airlines ticket classes such as: Business class, economy class.
special and universal.
Vietjet Air (VJ)
Vietjet Air was established in 2007, is an airline that provides cheap air tickets to passengers.
Currently, Vietjet Air is operating flights to all provinces and cities in the country and
internationally, with a large number of daily flights and a large number of passengers. Vietjet Air
operates modern aircraft A320 and A321, which are equipped with the most modern equipment.
After more than 10 years of operation, Vietjet Air has won many major awards at home and
abroad, including "the best low-cost airline in Asia in 2015", "Top 500 leading brands in
Vietnam". Asia 2016” and especially Vietjet Air has been recognized as the “best place to work”
for many years.
Currently, Vietjet's main ticket classes are: Business class (Skyboss) with the highest ticket,
Economy class (Eco) with the average price and Economy class (Promo) with the cheapest price.
Jetstar Pacific Airlines (BL)
Jetstar Pacific Airlines was established on June 15, 1991, is a pioneer airline in providing cheap
air tickets and belongs to the group of Vietnam Airlines. Jetstar Pacific owns modern and
modern aircraft including: Boeing B737-400, Airbus A320, Boeing 787 Dreamliner, Airbus
A321, Bombardier.
Jetstar Pacific operates a network of domestic and international flights to major airports, with
5,000 weekly departures and a large passenger base. Jetstar Pacific's domestic flights depart to
Hanoi, Hai Phong, Da Lat, Hue, Nha Trang, Da Nang, Pleiku, Quy Nhon, Thanh Hoa, Vinh, Tuy
Hoa. With international itineraries to Cambodia, Taiwan, Philippines, Singapore, Macau,
Malaysia, China, Japan, Korea, Australia,... Jetstar Pacific's seat classes include business class,
optimal (Starter Max), flexible class (Starter Plus).
From July 26, 2020, Jetstar Pacific Airlines officially changed its brand name back to Pacific
Airlines with a completely new brand identity, synchronized with Vietnam Airlines on all
commercial functions. The airline's new message is "The joy of taking off", implying that the
first joy in every passenger's trip comes from the moment the plane takes off and flies into the
sky. The airline currently owns 18 modern Airbus A320 aircraft, helping to connect tourists to
famous domestic and international cities and tourist destinations.
Bamboo Airways (QH)
Bamboo Airways is a new airline in Vietnam market established in 2017 managed by FLC
Group. Bamboo Airways' first flight took off on October 10, 2018 with a domestic flight.
Bamboo Airways operates domestic routes to Hai Phong, Thanh Hoa, Quang Ninh, Nha Trang,
Quy Nhon... Those are the main activities in the initial development process of Bamboo Airways
and in the coming time. will open international routes.
Unlike the above airlines, Bamboo Airways is not located in Noi Bai (Hanoi) or Tan Son Nhat
(Saigon), but at Phu Cat airport (Binh Dinh). Currently, Bamboo Airways operates modern
aircraft such as: Airbus A321Neo, Boeing 787 – 9 Dreamliner. Bamboo Airways' ticket classes
include Bamboo First Class (First Class), Business (Business Class), Bamboo Plus (Flexible
Economy Class), Bamboo Eco (Economy Class).
Market share
Not only racing in the competition for business licenses, Vinpearl Air, if operated commercially,
also faces many challenges in the sky.
As of mid-2019, Vietnam has 5 airlines operating 48 domestic routes. In which, Vietnam
Airlines operates 33 routes, Vietjet 35 routes, Bamboo Airways 24 routes, Jetstar Pacific 23
routes, and Vasco 9 routes.
Currently, the race for domestic market share is fierce. Vietjet has risen to the top of the market
share since 2017. In early 2019, Bamboo Airways officially operated commercially and put
pressure on the industry.

While the market share battle is fierce, the growth of Vietnam's aviation industry shows signs of
slowing down, because when the scale is larger, the growth rate will be lower than at the
beginning.
According to data from the International Air Transport Association (IATA), Vietnam has been
one of the most developed global aviation markets in the past decade with an average revenue
increase of 17.4%. . However, according to the Civil Aviation Authority of Vietnam (CAAV),
Vietnam's passenger growth in 2018 was only 12.9% and the first half of 2019 increased by
9.4%.
Đầu Tư newspaper quoted data from May 16 to June 15, the total passenger transport volume of
Vietnamese airlines reached 4.77 million passengers, although still up 5.7%, but domestic
passengers reached 3.35 million arrivals, an increase of only 1.4% compared to June 2018. This
is the lowest growth rate in the past 10 years.
Airports Corporation of Vietnam (ACV) also said that the growth of the air transport market is
showing signs of slowing down and saturation. MBS Securities believes that the domestic market
is growing slowly but the whole industry is still motivated by the international market and the
tourism industry.
Looking at the profits of Vietnam Airlines and Vietjet - the two airlines that hold the dominant
market share in the domestic market, it also shows that, after strong growth in 2014 - 2015 -
2016, it slowed down and went flat in 2017 - 2018. .

- Data from the Civil Aviation Authority of Vietnam (Ministry of Transport) shows a
significant shift in the habit of choosing service providers for traditional customers.
According to the latest data of the Civil Aviation Authority of Vietnam, in December 2019,
Vietjet accounted for 42.2% of the supply and transport market share compared to 41.2% in
January 2019.
Vietnam Airlines holds 33.3% market share, compared with approximately 34.5% at the
beginning of the year.
Bamboo Airways holds about 12.3% market share, 6 times higher than 2% achieved in January
2019.
The remaining Jetstar Pacific accounted for 10.6% market share and VASCO only accounted for
1.9% market share.
According to statistics, the average growth of visitors in the whole market in 2019 reached 13%,
indicating an expansion in market capacity.
In 2020, the domestic aviation market share is expected to have fierce competition after Bamboo
Airways announced its goal of holding a 30% share. Through statistics, the average passenger
growth reached 13% in 2019. That shows that the aviation market has an expansion in terms of
capacity.
With the fluctuation in aviation market share in 2019, it shows that customers are very focused
on the quality of aviation services. Significant shift from the habit of choosing service providers
with traditional customer groups.

High barriers to entry into the aviation industry

License barrier
Vietnam's aviation market currently has 5 domestic airlines operating including Vietnam
Airlines, Vietjet, Jetstar Pacific, Bamboo Airways and Vasco. Besides, a number of other units
also want to set foot in this field such as Vietstar, Vinpearl Air, Thien Minh Aviation or
Vietravel Airlines, but they do not have information on business and commercial operation
licenses.
In Vietnam, businesses have the right to apply for the establishment of an airline and submit
documents to the local government. Then, the dossier will be submitted to the Ministry of
Planning and Investment for appraisal to report to the Prime Minister. According to the
Investment Law 2014 and the Civil Aviation Law 2006, the licensing of civil air transport
business is under the decision-making authority of the Prime Minister.
Bamboo Airways was established in 2017 but only started commercial operation in early 2019,
while Vietnam Star Airlines (Vietstar) is still waiting for a license despite its establishment in
2016. So far, only one international carrier, Qantas, has joined. marketed through the Jetstar
Pacific joint venture, while AirAsia missed the 4th time to enter Vietnam when the Hai Au
Aviation joint venture with Thien Minh terminated its cooperation.
Prime Minister Nguyen Xuan Phuc in the mid-June directive related to the aviation industry
required that the establishment or increase of the scale of airlines must ensure the requirements
of maintaining and improving the flight safety operation capacity of the airlines. airlines, the
authorities' ability to supervise the safety of operations, the ability to provide specific capabilities
(pilots, engineers, repair and maintenance mechanics...) and the responsiveness of the airlines.
aviation infrastructure.
MBS Securities said that the Government may refuse the request to establish a new airline
because the national airline Vietnam Airlines is facing difficulties when the passenger transport
market share continuously declines under pressure from competitors.
Infrastructure is overloaded, lack of personnel
Not only cramped in the sky, the rapid growth of the aviation industry in recent years has
revealed urgent problems in infrastructure, management capacity, supervision, high-quality
personnel... from That affects the quality as well as the quantity of flights.
Typically, the airports of Tan Son Nhat, Da Nang and Cam Ranh are operating beyond their
designed capacity, posing an urgent need for airport expansion. Some airports have reached or
reached the designed capacity threshold, such as Tho Xuan, Cat Bi, Vinh, Phu Cat, Tuy Hoa
According to the Air Transport Development Plan for the period to 2020, with a vision to 2030
approved by the Prime Minister, Vietnamese airlines are expected to transport approximately 85
million passengers and need 340 aircraft. fly in 2023.
In which, Vietnam Airlines, Jetstar Pacific and Vietjet are expected to operate 257-266 aircraft.
Therefore, the remaining number of aircraft for other airlines is only about 74-83, Bamboo
Airways alone is allowed to increase to 30 by 2023. Thus, if the plan remains unchanged, the
number of aircraft operated by Vinpearl Air not too much.
Personnel is also an issue with the airline industry. Recently, there has been a phenomenon of a
shortage of pilots or pilots flying more than the prescribed number of hours. CAAV's alculations
show that in the period of 2020 - 2021, it is necessary to add 260 pilots per year. Meanwhile, the
ability to train from a basic pilot to a commercial pilot to fly Airbus 320/321 of Vietnam Airlines
and Vietjet - two airlines with flight training centers, is only about 100-120 pilots/year. .
High level of risk
Due to the nature of the air transport business, the bankruptcy of airlines is not as simple as
bankruptcy of a normal business, it affect the economy, and at the same time, the constraints on
large asset values make it difficult for firms to more bankruptcy. These exit barriers make it
difficult for firms to leave the industry, they expect to have a profitable business, stay in the
industry longer, making the competition increase.
Barriers to entry in the industry in terms of capital, technology, and input materials

Although in recent times, the government has had policies to encourage Privately participate in
the air transport industry, but those regulations are very difficultnfor industry entry. According to
the revised aviation law of Vietnam, the conditions for setting up an airline:
- Having legal capital to ensure the operation of aircraft. In which, the company has 1 to 10
machines flight must have a legal capital of 200 billion dong; If you want to exploit international
routes, capital more than 500 billion VND. Foreign investors can contribute capital to joint
ventures Vietnam air transport business with capital ratio is 49%.
- Having a professional apparatus and organizational structure for the air transport business.
- Have a specific aircraft operation plan.
Of the above regulations, the first one can create barriers to entry industry, but this barrier is not
too high. The fundraising process does not too difficult, with the initial capital from 500 billion
to 1000 billion not too large. But it also creates an initial barrier for businesses wanting to enter
the industry.
Another concern comes from foreign airlines. With the desire to participate in exploiting our
country's aviation market, foreign airlines want to established a domestic airline. But this is
subject to regulations government on foreign investment in the aviation market. Accordingly,
firms newly established airlines with foreign investment capital, foreign investment sources
other than holding only 49% of investment shares. In order to protect the domestic aviation
industry, the Government restricts joint ventures to establish airlines.
Technology and material resources
We compare in heavy industry like aircraft manufacturing. The barriers to entering the industry
are too large in terms of capital, technology, and input materials, so currently only have two
major airlines competing with each other, Airbus and Boeing. If there is no technological
mutations to create new or more optimal products than aircraft or similar feature but cheaper
price and technology is definitely a barrier to enter the manufacturing industry .Creating planes
is still too far away for other businesses.

The price ceiling mechanism is a barrier causing difficulties for airlines.

This also brings some potential risks of anti-competitive behavior in the market Air transport
such as selling air service fares at low rates to eliminate competitors compete. Currently,
competition between airlines in the market. Domestic is mainly based on fare. Therefore, some
airlines have economic potential can continuously reduce fares for a long time on routes with
competitors new competition entering the mining market. This is one of the difficulties for new
competitors enter the market.
Năng lực thương lượng của nhà cung cấp

Perhaps for the aviation industry, the pressure of suppliers is the greatest. This pressure comes
from aircraft suppliers, service lessors, ports aviation, repair and warranty. Due to the nature of
the industry, the number of suppliers limited, they have the right to charge higher prices than
they actually are.
In the current aircraft supply, except for traditional aircraft, seem to have become obsolete, there
are only two suppliers of modern aircraft, high quality that is Boeing and Airbus. Demand for
these two types of aircraft in the Vietnam market is huge. These are also two aircraft
manufacturers recognized by airlines preferred, the customers of these firms are very large, the
demand is high, while the production.
Exporting aircraft cannot be quickly, the quantity is not uniform, so the selling price of it is also
pushed up. Vietnamese airlines have no choice if you want to modernize your fleet to improve
competitiveness.
The second supplier is the airport, with related services. In the process of opening the door to
private carriers to enter the air transport market, Tte government has begun to separate port
clusters to operate independently as business services. And from there, these businesses began
the cycle of “correct calculation, enough” => push up the cost of airlines. The reason there is a
price increase because this is an exclusive service, the price is exclusive. Although these prices
are negotiable theory with customers, but still pushed to the top, and airlines have to accept,
because there is no other choice. In addition, airlines also endures ther pressures such as fuel
prices, labor supply, etc.
=> In general, the bargaining power of suppliers is very large. Firms Many airlines have little
choice, not able to integrate in reverse to be able to affect suppliers.
Buyer's bargaining power
Currently, with the participation of private airlines, airlines cheapness has helped customers have
more choices. Customers start to moves that demand service quality that matches the money they
spend. Cost switching between airlines is very low, maybe even zero. That is, when customers
don't like this airline, they can switch to using this airline easily use the services of another
airline. This gives price and service quality battle between carriers.
Possibility of substitute products
Alternative products for the air transport industry include: trucking, waterways and railways.
Each has its own characteristics, but it also has an impact to the business of the industry.
- Road: Perhaps in the forms of transport, road transport accounts for a large proportion
the largest, accounting for 81% of the total number of customers in all forms of transport, and
accounting for 65% of goods are shipped.
+ Advantages: Convenience, flexibility - Cheap price - Familiar with people.
+ Disadvantage: Time - Many accidents.
- Waterway: Water transport occupies an important position in transactions international trade, it
accounts for more than 90% of the world trade.
Water transport can compete with air transport thanks to: Economy by scale - Large shipping
volume - Transporting special items enemies like oil, coal, etc.
However, water transport has disadvantages: Time – Characteristics of waterways, especially by
sea, passengers feel more tired than when traveling by sea.
- Railway: is a fairly common form of transport to transport heavy goods and quite bulky over
long distances on the ground. Most countries, this mode of transport is owned by the state, is a
form of monopoly business.
The advantage of rail transport over air: Can transport goods bulky, heavy goods with larger
volumes - The unit transport cost is low, so it can be used to transport low-cost, high-volume
goods such as minerals property, coal… More accessibility, greater flexibility… railways run
through most provinces and cities while only some cities have airports.
The disadvantage of rail transport compared to air transport is that :Time is a very important
factor in the current period.
Product diferentiate
Airlines all have different promotion strategies, business models and services that are suitable for
each customer segment.
 Distinguished product categories
Promotion and product differentiation strategy
Jetstar Pacific
Jetstar Pacific is a low-cost airline in Vietnam born with the mission of providing safe,
convenient and fast transportation for Vietnamese people. With the cheapest network in Asia
Pacific and a large number of flights and a variety of destinations, Jetstar is chosen by many
people when they want to move from one place to another. Jetstar's domestic and international
flight routes are extremely wide to meet the diverse needs of consumers. To build a brand and
introduce services to consumers, Jetstar has deployed many media campaigns, in which
advertising on taxis is one of the main channels used to spread the image of Jetstar.
Bamboo Airways
Bamboo Airways has a direction that is considered extremely different, which is not all
discounts. If Vietnam Airlines, Vietjet Air or Jetstar Pacific simultaneously open sale promotions
for cheap air tickets from only VND0, VND1,600, VND1,800,... Then Bamboo Airways goes
hand in hand, combines promotions and discounts. tickets as well as developing luxury resort
combos. Some of the airline's cannot-to-be-missed airfare deals include: Fly Bamboo carefree on
Wednesdays, buy 1 get 1 free, unlimited flight cards, etc. Besides, the combos of flight tickets +
FLC hotel rooms also giving customers a high-class experience with outstanding service quality
such as: "Moving home to the sea" - Rent a whole villa for a whole month, save up to 80%,
"Home away from home" - Safe resort combo from only VND 1,690,000… All of the above
incentives are focused on building quality and convenience for customers. Highlighting Tre
Viet's competitive discount strategy is not all. Concentrate on exploiting empty airports. In
contrast to other domestic airlines, Bamboo Airways focuses on exploiting the niche market with
short routes. This strategy not only reduces the capacity of major airports but also partly
increases the choice for customers, building a separate direction to develop small routes of
localities with tourism potential. In addition to 3 airports in big cities such as Hanoi and Ho Chi
Minh City. Ho Chi Minh City, Da Nang, the company gives orientation to focus on a number of
small and medium niches such as Quy Nhon, Quang Binh, Thanh Hoa, Quang Ninh, Vinh, ..
Vietnam Airlines
Communication Marketing strategy of Vietnam Airlines builds very good communication about
its brand so that the customers of Vietnam Airlines have the clearest view. Press advertising is a
tangible advertising medium targeting the business customer segment, usually using large
newspapers with a nationwide distribution such as Labor, Youth... In addition, overseas VNA
uses major newspapers in key markets: Ashahi, Goodweeken, Travel Trade… Advertising on
television is the implementation of short commercials introducing the company's image, and at
the same time increasing the frequency of broadcasting news about the company's activities.
commercial news on domestic and international news.
Internet advertising plays a huge role in the overall strategy of Vietnam Airlines today. Through
the airline's official website, in addition to the purpose of introducing products, it also helps to
provide Vietnam Airlines' target customers with information about the entire service usage
process, implementation steps, regulations, … in addition to the commitment to quality
standards, and updated information on VNA's activities.
VietJet Air
Cheap price" is the leading pricing strategy that VietJet Air still maintains up to the present time.
Based on the average income of Vietnamese people, such a pricing strategy is absolutely correct.
But to get such a "breathable" price for passengers, VietJet must also find ways to optimize
costs.