Some General Indicators to Assess the Labor Situation of Vietnam Airlines

Each week with B777 aircraft, France Airlines takes on 5 flights per week with A340-300. This contract marks a major step in the cooperation between the two airlines, bringing benefits to customers and airlines, and reflecting the strength of Vietnam Airlines in the process of international integration and cooperation for mutual development.

On June 20, 2005, VNA opened its first monthly route to Germany, flights from Hanoi, Ho Chi Minh City to Frankfurt with a frequency of 3 flights/week.

This is the second direct flight route in Europe. The first flight is to the French city of Paris.

On July 28, 2005, Vietnam Airlines opened the fifth flight route operated by VNA to Japan, the Ho Chi Minh City-Nagoya-Ho Chi Minh City route with a frequency of 3 flights/week using B767-300ER aircraft. With the opening of the flight route to Nagoya, VNA is currently the largest airline in terms of number of flights.

Monthly routes and frequencies between Vietnam and Japan. Every week, VNA has 24 flights to major cities in Japan, including 4 flights between Hanoi-Tokyo, 7 flights between Ho Chi Minh City-Tokyo, 7 flights between Ho Chi Minh City-Osaka, 3 flights between Ho Chi Minh City-Fukuoka, 3 flights between Ho Chi Minh City-Nagoya.

With the aim of expanding cooperation and economic and tourism exchanges with Laos, and continuing to consolidate and develop Vietnam Airlines' flight network in the Laos-Cambodia-Myanmar-Vietnam sub-region, since November 6, 2006, VNA has opened a direct flight route Hanoi-Loung Phrabang-Hanoi with a frequency of 4 flights/week, operated by ATR 72 aircraft. This is the third VNA flight to Laos, after the route Hanoi-Vientiane-Hanoi with frequency of 4 trips/week.

On August 2, 2007, VNA officially opened the Hanoi-Busan (Korea) route. Initially, this route was operated with a frequency of 3 flights/week, using A321 aircraft. This is the first route operated by VNA to Korea, in addition to the existing routes Hanoi/Ho Chi Minh City-Seoul, Ho Chi Minh City-Busan.

Currently, VNA is effectively operating the first trans-Eastern route Hanoi-Vientiane-Phnom Penh-Ho Chi Minh City (and vice versa) with a frequency of 1 flight/day by Forker aircraft. From the upcoming winter flight schedule, VNA will launch the second trans-Eastern route (Hanoi-Loung Phrabang-Siem Reap) and Hanoi-Quang Chau.

Along with investing in developing and expanding the flight network to Europe

It is expected that by the end of 2008, Vietnam Airlines will open a direct flight route between Ho Chi Minh City - Los Angeles with an initial frequency of 5 flights per week using Boeing B777-200ER aircraft.

Thus, it can be seen that Vietnam Airlines' international flight network is constantly expanding to best meet the needs of passenger and cargo transportation.

International flight network structure:

Vietnam Airlines' key markets include Europe (25% of passenger volume, 59% of passenger volume/km); North Asia (43% of ton volume, 28% of ton volume/km); Southeast Asia (31% of ton volume and 9% of ton volume/km). The Australian, Lao and Cambodian markets account for insignificant proportions. Although it has not yet exploited regular cargo routes, in recent times VNA has made great efforts to increase its cargo transport capacity combined with passenger flights and through chartering, purchasing loads and cooperating with foreign airlines, income from cargo transport activities increasingly accounts for an important proportion of the financial results of flights.

2) Status of international cooperation in cargo transportation of VNA

Vietnam Airlines always attaches importance to maintaining and developing cooperative relationships with airlines in the region and the world to improve its capacity to meet the increasing demand for transporting import and export goods.

2.1. Period before 1995

In the 1980s, VNA directly operated mainly domestic routes, international routes were still very limited. At that time, airlines with routes to Vietnam were all unilateral flights because Vietnam did not have direct routes. The form of commercial cooperation at that time was that foreign airlines had to pay commercial rights to Vietnamese airlines. To have the right to operate to Vietnam, partner airlines had to sign a commercial cooperation contract with VNA which stipulated the commercial rights fee to be paid to VNA for each kilogram of goods (typically the agreement with Air France and Aeroflot).

Instead of the form of direct commercial rights collection with a sum of money as above, some commercial cooperation contracts were later signed in the form of cargo leasing. Specifically, the partner flying unilaterally to Vietnam will have to compensate VNA by reserving or providing free cargo for VNA to have the right to exploit.

Entering the 90s, when VNA grew stronger and directly operated to many foreign destinations, the commercial cooperation contracts with partners that had been signed before were adjusted. The new contracts all had new colors in both content and form. To balance the flight rights, when VNA's transport capacity was still limited, in these contracts, VNA always proposed implementing strict regulations on the quantity of goods allowed to be transported on the plane or in total each month, or regulating the supply quota for each flight by week or by month.

2.2. Period 1995 to present

Since 1995, the air transport market has developed by leaps and bounds. With the trend of liberalization of the sky, the interdependence in exploitation between airlines is increasing, at the same time the competitive environment is becoming more and more fierce.

become fierce. Therefore, in order to survive and develop, airlines must try to promote cooperation to participate in as much of the market as possible. VNA is no exception to that general trend. In December 1999, the VNA Cargo Planning and Marketing Department was established on the basis of separation from the Cargo Department of the Market Planning Department. From here, VNA's cargo transportation activities in general and international cooperation activities in the industry in particular have entered a new period of development. Forms of international cooperation in cargo transportation are increasingly applied.

Forms of cooperation of VNA:

(1) Document recognition (Interlines): is the most primitive form of cooperation among airlines. This type of contract allows one airline (ticket issuing airline) to issue tickets that include the flight segment of the other airline (operating airline) to exploit and accept for transportation.

Currently, VNA has signed 89 contracts to recognize transport documents with international airlines, including those that have not yet operated flights to Vietnam.

(2) Special Shared Route Agreement (SPA): is a type of contract in which participating airlines give each other preferential prices on each other's flights. The terms of revenue sharing are agreed upon by the participating airlines.

Up to now, VNA has had 71 special segment sharing contracts with airlines such as: Malaysia Airlines, Laudar Air, Air Ukraine,...

(3) Codeshare cooperation: is an agreement under which an airline operating a particular route/flight (operating airline) allows another airline that does not operate (participating airline) to publish and sell on its flights under the flight number of the participating airline.

Joint ventures with major airlines such as Cathay Pacific (CX), Korean Air (KF), Asiana Airlines (OZ), China Airlines (CI) and Eva Airways (BR),... are a long-term policy of VNA. Through close cooperation with partners, customers' goods are transported to many destinations around the world quickly and safely.

(4) Joint venture cooperation: is a form in which participating airlines, in addition to operating on each other's routes/flights, will also share revenue and costs on these routes/flights.

Since 1995, VNA has signed a joint venture contract with Cathay Pacific (CX) to share load, revenue and costs at a ratio of 50:50 on the HAN/SGN-HKG route.

The airline also participates in a joint venture with Korean Air (KE), in which VNA operates three routes SGN-PUS-SGN; HAN-ICN-HAN; SGN-ICN- SGN; and is a participating airline on the HAN-PUS-HAN route.

(5) Alliance

Up to now, VNA has only joined the CLMV sub-regional alliance. This is a common alliance for both cargo and passenger transport. However, VNA has not yet joined any global alliance for cargo transport.

These international cooperation contracts are usually signed on a yearly basis. After 1 year, VNA must re-negotiate and re-sign the contract to adapt to general changes in the market.

3. Vietnam Airlines' human resources

3.1. Characteristics and structure of human resources

The number of staff of Vietnam Airlines Corporation is 13,887 people, the largest force in the Vietnamese civil aviation industry.

accounting for 66.4% of the total number of employees of the Vietnam Civil Aviation Industry as of December 31, 2006.

According to statistics of the Civil Aviation Authority of Vietnam, the current labor situation of Vietnam Airlines Corporation as of December 31, 2006 is as follows:

Table 3: Some general indicators to assess the labor situation of Vietnam Airlines

Unit

Number of workers

move (person)

Proportion (%)

Average age

army (age)

HKVN Corporation

13,887

66.4

35.1

Civil aviation industry

Vietnam use

20,904

100

35.4

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Table 4: Labor structure by level

Target

Above university

University

Intermediate

Primary worker

Technical worker

technique

Not trained

Number of employees

(People)

125

4,612

2,297

3,961

1,302

1,630

Proportion (%)

0.7

33.2

16.5

28.5

9.4

11.7

Table 5: Labor structure by age

Target

Under 30 years old	30-40 years old	40-50 years old	50-60 years old
Number of workers	6,862	4.191	2,127	707

move (person)


Proportion (%)	49.4	30.2	15.3	5.1

Source: Civil Aviation Authority, civil aviation development strategy to 2010

Due to the recruitment and training policy, Vietnam Airlines Corporation today has a multi-generational workforce, combining people with many years of experience with the younger generation with basic training at home and abroad.

However, due to the historical conditions of our country, there are still many officers and employees who have not received basic and comprehensive training. The number of officers with post-graduate degrees is not high, requiring the Company to continuously open training and retraining courses to foster and update knowledge about air transport for employees.

3.2. Human resource training situation at Vietnam Airlines

The nature of air transport is the use of high technology, including many stages with high requirements and close coordination according to strict procedures for each link in that technological chain. Therefore, a mandatory requirement for Vietnam Airlines is to implement a human resource training strategy according to international standards to operate and exploit that system effectively.

Over the past 10 years, the Company has deployed domestic and foreign technology transfer training for nearly 18,000 people, mainly pilots, technicians and managers. From renting the entire flight crew and aircraft in 1993-1994, up to now, the Company has trained and met 80% of main pilots; 90% of co-pilots for B-777/767, A-320/321; 100% of pilots for ATR-72

and Fokker-70. More than 900 engineers and mechanics were trained and converted abroad in 2002, nearly 1,100 in 2003, about 1,350 in 2004, and last year 1,600. Up to now, the technical team is capable of taking on most of the key positions in the field of aircraft maintenance that previously had to be hired from abroad. Aircraft factories have begun to provide maintenance services for the Company itself and other airlines in the Vietnamese market.

In addition, international freight transport is a field closely related to foreign laws, regulations, and customs, and foreign airports, so the Company's staff, in addition to foreign language proficiency and transportation expertise, also need to supplement their knowledge of foreign laws. In response to this requirement, in recent years, the Company has focused more on training to improve foreign language proficiency and freight transport expertise. Every year, the Company also sends its staff with good achievements to study abroad.

4. Vietnam Airlines' import and export freight transport results

4.1. Volume of goods transported

If in 1991, the total volume of air cargo transported to and from Vietnam was only about 18 thousand tons, by 2004, this number had reached 208 thousand tons. The average growth rate for the entire period 1991-2004 was 22.7%. With such a growth rate, the total volume of domestic and international cargo will reach 270 thousand tons by 2010.

Table 6: Freight transport results in the period 2000-2006

Market

Unit

2000

2001

2002

2003

2004

2005

2006

Total

Ton