Vietnam Airlines Market

History:

Vietnam Airlines is the national flag carrier and dominant airline in Viet Nam, which was established as a state enterprise in April 1993 and is headquartered in Hanoi, with hubs at Noi Bai (Hanoi) and Tan Son Nhat (Ho Chi Minh City) international airports. From there, the airline flies to 46 destinations in 19 countries, excluding codeshares. Its fleet of 66 aircraft consists of 10 Boeing 777s, 10 Airbus A330s, 31 Airbus A320/A321s and 13 ATR 72s, plus two Fokker 70s. The airline aims to have a fleet of 115 aircraft by 2015 and 170 by 2020.

The state-owned Vietnam Airlines Corporation was formally established in 1996 and comprises 20 aviation service subsidiaries. The company is overseen by an seven-seat management board, members of which are appointed by the Vietnamese Prime Minister. At one time, Vietnam Airlines was also the major stakeholder in the country's second-largest carrier, Jetstar Pacific Airlines. (Vietnamairlines.com.vn)

Vietnam Airlines is ranked as a 3-star airline, according to the independent research consultancy firm Skytrax. In June 2010, it became a member of SkyTeam, the world's second largest global airline alliance and it is the only Southeast Asian carrier to join the global airline alliance. (Airlinequality.com/airline/vn)

Vietnam Airlines Business Model:

Full Services Carrier

Products:

The core products include flight routes, available seats, etc. The secondary products include ground service and in-flight service in which the ground service is tickets reservations, check-in, etc and in-flight service is the provision of beverage, meals, and entertainment facilities, children-travel-alone care during the flight. VNA has been upgrading and diversifying the services such as providing traditional food which is highly appreciated by foreigners. VNA is building a standardized service system to improve the service quality from booking to providing special meal on demand.

Price:

Economy segment: An "economy" pricing strategy is suggested to capture the huge potential of the domestic transport market. By focusing on the minimum required services and deploying technology such as online booking, e-ticketing, the airline can lower operating costs and then reduce prices to make air travel more affordable

Despite being a secondary target, business segments (domestic and international) are often big spender and not price-conscious as their travels are reimbursed by their companies. Thus medium price, together with medium quality as discussed in service product tactics, will offer the basis "medium value" pricing strategy

Vietnam Airlines introduces pricing flexibility in the domestic market in order to better manage demand and supply and optimize the total yield. Low price may be offered in periods or times of low demand to encourage passengers to travel, while higher