ASSIGNMENT 1 FRONT SHEET

Qualification BTEC Level 5HND Diploma in Business

Unit number and title Unit 17: Understanding and Leading change

Submission date 19/1/2022 Date Received 1st submission

Re-submission Date Date Received 2nd submission

Student Name Ngo Thi Hang Student ID GBH190131

Class GBH0907 Assessor name Vu Anh Tai

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 Table of contents
I. Introduction................................................................................................................................................ 4
II. Main contents........................................................................................................................................... 4
1. An overview of the organization case studies and the COVID 19 affects Vietjet Air and
China Southern Airlines.......................................................................................................................4
1.1. Viejet Air..................................................................................................................................4
1.2. China Southern Airlines........................................................................................................6
2. Identify external and internal drivers of changes........................................................................ 7
2.1 Analysis of the External Environment using PEST/EL..................................................... 8
2.2. SWOT Analysis....................................................................................................................13
3. An Analysis Of Changes That Affect Organizational Behaviors And Their Reactions....... 16
3.1. The Changes of the business............................................................................................16
3.1.1. Vietjet Air........................................................................................................................... 16
3.1.2. China Southern Airlines.................................................................................................. 17
3.2. These changes affect organizational behaviors.............................................................19
4. Recommendation........................................................................................................................... 21
III. Conclusion.............................................................................................................................................24
IV. References............................................................................................................................................25
I. Introduction

The COVID-19 pandemic has had a major impact on international travel and tourism. Airlines
have canceled flights, and hotels are nearly empty, putting tourism agencies in the region at risk
of enormous economic harm and job losses (Kumar & Nafi, 2020). To investigate its significant
impact on these two industries, this report will examine the effects of the shift in general and
Covid-19 in specific on Vietjet Air and China Southern Airlines. The report is divided into four
sections. The first section provides an overview of Vietjet Air and China Southern Airlines. The
PESTEL and SWOT analyses are the next steps. The third section focuses on the company's
changes. The final section looks at how change affects organizational behavior and makes
recommendations for how the two companies may improve the effectiveness of the change and
lessen the negative effects.

II. Main contents

1. An overview of the organization case studies and the COVID 19 affects Vietjet Air and
China Southern Airlines.

1.1. Viejet Air

Vietjet Air is the first airline in Vietnam to operate on the new generation airline model, which is
low-cost and offers a wide range of services. Through modern e-commerce technology solutions,
the airline not only transports passengers but also meets their consumption needs for goods and
services (Vietjets, 2022).

Vietjet currently operates a network of routes to over 30 destinations in the area, including
Thailand, Singapore, Malaysia, Myanmar, Taiwan, Korea, China, Japan, and Hong Kong, with a
contemporary fleet of A320 and A321 aircraft with an average age of 3.3 years (Vietjets, 2022).
With the IOSA Operational Safety Certificate, Vietjet is an official member of the International Air
Transport Association (IATA). Safety culture is a key aspect of Vietjet's corporate culture, which
is well-understood by all employees throughout the system, from the top down (Vietjets, 2022).

With the vision of becoming an international airline corporation, Vietjet Air has a large network
of flights around the area and the world, expanding not only aviation services but also consumer
goods on an e-commerce platform (Vietjets, 2022). The company's mission is to exploit and
develop a large network of domestic, regional, and international routes; make air services a
popular mode of road transport in Vietnam and worldwide; and bring happiness and pride to
customers through superior, luxurious service and friendly smiles (Vietjets, 2022).

Vietjet has set a objectives of VND 15,500 billion in air transport revenue and VND 21,900
billion in consolidated revenue for 2021, up 20% from 2020, thanks to strong freight revenue
promotion, expanding the business of new aviation services, human resource training services,
aircraft technical repair services, project investment, and finance in addition to air transport, and
preparing for the recovery period ( Vietjet, 2022).

COVID-19's effects on Vietjet Air and the aviation sector in general

According to the International Civil Aviation Organization's (ICAO) report on the state of aviation
activities in 2020, the number of international and domestic passengers fell by 1.38 billion and
1.32 billion, respectively, down 74 percent and 50 percent from 2019, resulting in revenue losses
of $250 billion and 120 billion USD. Vietnam's aviation industry is not immune to the COVID-19
pandemic, which is wreaking havoc on the global aviation industry. According to the Ministry of
Planning and Investment's report on business development in 2020 and the first five months of
2021, the aviation industry experienced the most severe decline, with demand for air
transportation falling by 34.5% to 65.9% in 2020, and revenue of aviation businesses falling by
61 percent compared to 2019 (Lan, 2021).

The COVID-19 epidemic forced the aviation industry to cease operations, resulting in daily
losses of more than 500 billion VND. The Vietnam Aviation Business Association has recently
announced the daily "evaporation" amount (VABA). According to VABA President, airline income
has steadily declined since the start of the virus till now, with revenue presently being less than
10% of what it was before the epidemic. Aviation businesses are losing money at a growing rate,
with losses expected to reach 20,000 billion VND by 2021; airline short-term and past-due debts
total 36,000 billion VND (Cong and Bong, 2021).

In the first half of 2021, Vietjet Air (VJC) sold roughly 17.8 million treasury shares for a profit of
VND 2,350 billion, boosting charter capital and increasing the number of outstanding shares.
operating and boosting business funding sources Shareholders have also given their approval
for Vietjet Air to offer private shares worth up to 15% of charter capital. Since the end of 2020,
the airline has been preparing capital preparedness plans and has received some stock and
bond proposals. Investors from Korea and Hong Kong are currently interested in investing. The
low-cost carrier also intends to issue individual bonds worth $300 million or list bonds on
overseas markets with a five-year maturity (Cong and Bong, 2021).

Vietjet does not plan to lose money at its annual general meeting in 2021. For the entire year of
2021, the objective for air transport revenue and consolidated revenue is VND 28,500 and VND
32 trillion, respectively, representing a growth of 87 percent and 76 percent. The total net profit
after tax for the year was 1,000 billion VND, a 14.5-fold increase over the previous year. Vietjet
Air reported a consolidated profit after tax of 123 billion VND in the first quarter of this year,
meeting 12.3% of the year's target (Cong and Bong, 2021). In the context of the COVID-19
epidemic, the core business segment became difficult, airlines also took steps to diversify
revenue sources and save themselves.

1.2. China Southern Airlines

Guangzhou is the headquarters of China Southern Airlines Company Limited (hereafter referred
to as China Southern). China Southern operates eight public air transportation firms, including
Xiamen Airlines (Xiamen Air), Henan Airlines (Henan Airlines), and Guizhou Airlines (Xiamen
Airlines). Guizhou Airlines) and Zhuhai Airlines (Zhuhai Airlines); has 20 branches, including
branches in Xinjiang, Northern China, and Beijing, 23 domestic sales offices in most major
Chinese cities, including Hangzhou and Qingdao, and 51 international sales offices in major
cities such as Singapore, New York, and Paris; has 20 branches, including branches in Xinjiang,
Northern China, and Beijing; and has 51 international sales offices in major cities such as
Singapore, New York, and Paris (csair, 2022).

The "Sunshine China Southern" culture is highlighted by China Southern Airlines, whose mission
has always been "Connecting the world, creating a better life." China Southern Airlines is striving
to achieve the vision of "Building a world-class airline with global competitiveness" by adhering
to the fundamental principles of "Customer, Employee, Advantage, Creativity, Return, Return"
and the spirit of "Industrious, Practical, Inclusive, Creative" (csair, 2022).
In terms of objectives, by 2025, China Southern hopes to have deployed more than 200
specialized aircraft for PKX, with more than 900 planes taking off and landing every day. China
Southern Airlines makes every effort to work cooperatively with all parties to transform Beijing
Daxing International Airport into a new world-class transit airport and a gateway to bring China's
convenience and high performance to the world (csair, 2022).

The impacts of COVID-19 on China Southern Airlines

As previously stated concerning the Covid pandemic's impact on Vietjet Air in particular and the
aviation industry in general, the aviation industry has suffered significant economic losses: many
flights have been canceled, aircraft have been "overloaded," passengers have been absent,
airports have been closed, airlines have continuously reported losses... demonstrating the
epidemic's negative impact on the industry's business activities.

China Southern Airlines, like Vietjet Air, declared on March 31 that the COVID-19 virus "wiped
out" foreign tourism and tourism activities last year, costing the company billions of dollars. The
likelihood of recovery is "casting a black shadow" by this new type of disease. Even though
domestic tourism in China was resuming, China Southern Airlines recorded a loss of 10.8 billion
yuan ($1.65 billion) in 2020. Travel restrictions in countries are likely to be gradually relaxed as a
result of the expanded immunization program, according to the airline. However, there is still a
lot of uncertainty about how quickly aviation demand will rebound (Tra, 2021).

2. Identify external and internal drivers of changes

PESTLE is a tool that is more pragmatic than pure in nature and is employed in "real world"
contexts (Walsh, et al., 2019). PESTEL analysis is an approach for examining macro-
environmental aspects such as political, economics, society, technology, the environment, and
legal. Businesses are constantly influenced by external factors; as a result, they must study and
analyze them in order to adopt plans and policies that are appropriate for their development
(Balasopoulou, et al., 2016). Furthermore, a SWOT analysis is a method for analyzing the
performance-enhancing and limiting elements that a business faces in both its internal and
external contexts (Leigh, 2009). A SWOT/PESTLE analysis is used in this study to determine the
primary internal and external elements that have an impact on the aviation industry's success.
Based on the SWOT and PESTLE analyses of Vietjet Air and China Southern Airlines, the study
will discuss the external and internal drivers of change in this part.

2.1 Analysis of the External Environment using PEST/EL

It can be seen that, because China Southern Airlines is a worldwide airline with operations in
many countries across the world, global macro variables will have an impact on the company.
External changes to China Southern Airlines will not be limited to a single country, and large
global changes will have a greater impact on the group's operations than local enterprises.
Vietjet Air, unlike China Southern Airlines, is a Vietnamese airline, hence it will be influenced
primarily by external factors in the Vietnamese market, as well as indirectly by global macro
issues (Vietjet, 2021).

Political factors

The political climate in Vietnam is described as stable and calm. It aids the long-term
development of aviation industries by providing a stable political environment, unoccupied
airports, and unfettered and uncontrolled airspace. Furthermore, Vietnam fosters the
establishment of laws and regulations to stimulate international investment by providing a
favorable environment for private aviation enterprises. For example, at the start of 2021, the
world's airlines will ask the government for about 70-80 billion dollars to help them overcome the
crisis; the Vietnamese government also has a policy of lowering 50% of prices and service fees
for take-off and landing, operating flights departing and picking up passengers, as well as
protection of the environment tax incentives for airlines. In this case, Vietjet suggested
borrowing VND 4,000-5,000 billion for three years (2021-2023) and receiving a 4% interest rate
subsidy. These limits are a major source of assistance for Vietjet, especially in conquering the
pandemic issue, even though they are temporary and only endure for a short time (Phan, 2021).

The political element of China Southern Airlines, on the other hand, is influenced by the
following factors. China's relationship with the Trump administration and the US government is
strained. The United States has never been a fan of communist or socialist governments. As a
result, they regard China's censorship practices as posing a serious threat to global security and
freedom of expression. As a result, China Southern Airlines is under increasing international
pressure to comply with World Trade Organization aviation laws (Shaw, 2021). China Southern
Airlines A has profited from lower tax regulations in the Western Hemisphere over the past two
decades. It has resulted in higher revenues and research and development spending. Inequality
is rising in China, which could lead to changes in tax policy. Second, to reduce the transportation
sector's carbon footprint, local governments are considering particular aviation tax regulations
(Embapro, 2022).

From there, it can be observed that two airline businesses in two distinct countries benefit from
political considerations in their respective countries. Political issues will have less of an impact
on Vietjet Air than they will on China Southern Airlines, according to the above analysis.

Economic factors

Economic growth rate, inflation, interest rates, fuel price changes, and other economic factors all
have an impact on Vietjet. Vietnam's economy has shown great resilience throughout times of
crisis, most recently the COVID-19 pandemic, because of its robust foundation. Vietnam will be
one of the few countries with positive GDP growth (2.91 percent) throughout the pandemic's
outbreak in 2020, allowing the aircraft industry to deal with the problem through other economic
activity (World Bank, 2021). In the occurrence of unexpected inflationary, Vietjet will need to alter
rates, charges, and ticket categories to properly balance the additional costs while staying within
the permissible price range (Ha, 2021). Furthermore, fluctuations in fuel prices have a significant
impact on airline operations and tactics. Fuel costs account for the highest amount of Vietjet's
operating costs; fuel prices depend on various political and economic problems in the globe and
are entirely outside the company's control (Cafef, 2021). In the face of severe competition in the
airline industry, it makes it extremely difficult for the airline to readily impose growing fares to
compensate for fuel expenses.

About China Southern Airlines, China is that the country's GDP will be 24.2 trillion dollars by
the end of 2020, which is the biggest revenue of any country in the world. China has the 73rd
greatest yearly per capita GDP in the world, at 17206 US dollars. Demand is stable due to rising
disposable income and increased investment in new industries such as aviation. Furthermore,
manufacturers all across the world benefit from China's low-cost workforce. As a result, they
outsource their manufacturing to China (Shaw, 2021). In the transportation industry, Chinese
human resources have a medium to high skill level. China Southern Airlines can use technology
not only to improve service in China but also to create global prospects for its highly skilled
personnel (Embapro, 2022). In the third quarter, the Guangzhou-based airline reported a net
profit of 711 million yuan ($106 million), down 70% year on year. Sales plunged 40% to 26.38
billion yuan, but cost-cutting initiatives like lower energy use and lower oil prices helped the
airline recover. A stronger local currency than the greenback reduces the cost of big purchases
in dollars, such as plane tickets and electricity. Despite becoming profitable in the third quarter,
China Southern suffered a net loss of 7.46 billion yuan in the first nine months of 2020 due to
large losses in the first half of the year (Ho, 2020). Analysts, according to airline website Simple
Flying, believe China Southern will only be able to keep its position for a few months until US
airlines recover. The situation is also affected by the number of diseases and new outbreaks (Ho,
2020).

The above analysis shows that the economies of the two countries have a significant impact on
Vietjet and China Southern Airlines. However, because of the trade conflict between the United
States and China, China Southern Airlines remains reliant on the global economy. China
Southern Airlines flights have been blocked by other US airlines. Meanwhile, the Vietnamese
economy has a significant impact on Vietjet.

Social Factor

Nowadays, just a portion of the geographical capacity is being utilized, primarily for transit flights,
while the organization makes use of its ability to construct hubs. Tourist and freight
transshipment (hub) to Singapore, Bangkok, and other locations have yet to be established
(Vietjet, 2020a). As of February 2020, the total population of Vietnam is around 97 million (BBC,
2020). The country's developing middle class is fast expanding, and by 2026, it is predicted to
account for 26% of the population (The World Bank Group, 2020). Staff training with degrees
and certifications of primary and secondary education or higher will be 24.1 percent in 2020, up
1.3 percent from 2019. In metropolitan regions, the proportion is 39.9%, while in rural areas, it is
16.3 percent. Employees in metropolitan regions have higher training chances than domestic
workers, resulting in this considerable disparity. Labor quality still differs significantly between
regions, particularly between urban and rural areas. Although the gap in worker knowledge and
abilities has narrowed over time, the proportion of employees aged 15 and above working with
training in urban areas is still 2.66 times higher than in the region. At the time of the poll in 2018,
rural areas were underrepresented (Tong cuc thong ke, 2021). Vietnamese people are known
for their friendliness. Many travelers have recounted their memorable encounters with locals on
social media. Many visitors, on the other hand, complain of being hounded by locals, being
overcharged, and being treated badly. Although Vietnam has made significant economic growth
over the years, worries regarding income distribution are growing. The wealth divide is widening
and widening. The country also has a social issue in the form of an aging population.

As we all know, China has the world's largest population, with 1.4 billion people. To meet
consumer demand, businesses and companies must mass-produce things. China has an
amazing literacy rate of 96.4 percent, which is among the world's highest (Shaw, 2021). China
has a high level of education, particularly in the sector of China Southern Airlines. It can be used
by China Southern Airlines to increase its presence in China. The media has a significant impact
on public opinion in China. In China, both traditional and social media are quickly expanding.
This tendency can be used by China Southern Airlines to better sell and position its products
(Embapro, 2022). Furthermore, social and hierarchical standards in China differ from those in
China Southern Airlines' home market. To service clients in China, it should aim to establish a
local team that knows societal conventions and has superior attitudes (Embapro, 2022).

The air transport sector cannot avoid losses owing to unprecedented challenges in the history
of the global aviation business as a result of the impact of the Covid-19 outbreak. The number of
passengers declined dramatically while operating costs remained stable, causing the global
aviation business to continue to report record losses. This cycle affects Vietnamese airlines as
well. As a result, a large number of workers were laid off. Along with the State's suggestion of
supportive policies, the airline also developed a number of remedies to address the urgent
problems.

Technological factors

For a long time, Vietnam's IT revolution has been driven by a strong startup culture,
multinational investments, low costs, government efforts, and an educated workforce. lengthy.
Da Nang Hi-Tech Park and Saigon Hi-Tech Park, for example, feature offices and factories for
over 700 enterprises, including 220 foreign companies specializing in IT and hardware
engineering. Infrastructure development, software development, and hardware manufacturing
Vietnam is currently the world's ninth-largest provider of IT services. Fintech, artificial
intelligence, e-commerce, outsourcing, and educational technology are the five IT industries that
are now trending (Samuel, 2019). Vietjet Air's success is attributed to its ongoing innovation of
thought and willingness to use cutting-edge technology and gadgets to deliver the finest possible
service to customers. Because of its current size and position, Vietjet may invest in prestigious
specialized technology solutions to support company management, such as AMOS, AIMS,
AirFase, SFCO2, Intellisys, and so on. In addition, Vietjet signed a collaboration agreement with
Lufthansa Technik, which would provide VietJet with cutting-edge technology, maintenance
services, technical project advice, staff technical training, and other consulting services (Vietjet,
2020a).

China, according to eMarketer estimates, will have the most online users by the end of 2020,
with more than 914.1 million. China has 65.5 percent of the world's population. By the end of
2022, it will have 975 million online users. China aspires to be a global scientific and technology
leader (Shaw, 2021). The improvements are based on cutting-edge technologies developed by
China Southern Airlines' rivals. This can reveal what competitors are thinking as well as the
airline's business model's future (Embapro, 2022). China Southern is also proud and privileged
to work alongside MTU Aero Engines, a German aircraft engine manufacturer, to run China's
largest and most advanced aviation engine overhaul and maintenance facility. China Southern's
"Flight Operation Control System" and "Engine Performance Monitoring System" were awarded
the Second Prize for "National Science and Technology Progress," making them the most
advanced IT systems for the Chinese aviation industry (csair, 2022).

In short, politics, the economy, society, and technology can all be possibilities and difficulties for
both Vietjet Air and China Southern Airlines. Moreover, in the present Covid-19 setting, the
problems are claimed to be more than both short and long, necessitating strategic plans and
improvements for both enterprises to maintain a competitive advantage in the market.
2.2. SWOT Analysis

2.2.1. SWOT Analysis of Vietjet Air

Strengths

The company's first strength is its year-over-year increase in market share. Vietjet, which began
operations at the end of 2011, has grown to become the largest local airline, with a market share
of 42 percent. Since 2013, the company has consistently reported profits (Vietjet, 2020a). The
company's second strength is that it has the lowest cost per product unit in Asia and the world.
Most low-cost airlines rely heavily on revenue from in-flight amenities to succeed. This is another
reason that has aided the company's rapid profitability. This source currently accounts for more
than 23% of the company's revenue (Vietjet, 2020a). The Vietjet brand is well-known for its
effective marketing campaigns that tap into the psyche of target customers. This low-cost
airline's distribution system, which covers the entire country, is also one of its most important
assets (Vietjet, 2020a).

Weaknesses

The lack of a joint venture partner is the company's drawback. The next step is to compete in
markets where well-known airlines already operate, such as Thailand (Vietjet, 2020). The next
flaw to address is that the majority of VietJet's profit comes from sales and leaseback activities,
but when the aircraft's life is extended, the airline will have to pay greater costs than the average
rental price (Vietjet, 2020a).

Opportunities

Vietnam is becoming a famous tourism destination; in 2016, the number of visitors topped 10
million, up 26% from the previous year. When compared to the same period previous year, the
number increased by 30% in the first nine months of 2017. This pattern is likely to persist. This is
a great chance for VietJet (Vietjet, 2020a). The airline currently operates flights to Korea, Taiwan,
Malaysia, Thailand, and Cambodia regularly. China is the world's largest and fastest-growing
tourist destination. Furthermore, Vietnam's geographical location makes transferring travelers
from Southeast Asia to Northeast Asia relatively convenient. Because Vietnam is a developing
country, many people prefer and are prepared to pay for low-cost airlines. This is also why, in
the last two years, Vietjet Air, a latecomer, has eclipsed Vietnam Airlines in terms of market
share (Thanh, 2021).

Threats

The aviation industry's competition is becoming increasingly harsh. AirAsia and Lion, two of the
most well-known Southeast Asian airlines, are exploring cooperative operations in Vietnam.
Many low-cost airlines recognize the market potential in our country and are eager to enter.
Vietnam's aviation market will slow down after increasing by 20% to 30% between 2012 and
2016. VietJet will be forced to rely more on the overseas market as domestic growth slows,
which will be difficult. Furthermore, domestic tourism demand is currently growing at a rate that
is 4-5 times faster than GDP, which is unsustainable. Overcrowding at airports makes it difficult
to add new routes or increase frequency (Thanh, 2021).

2.2.2. SWOT of China Southern Airlines

Strengths

A company's strengths are the qualities and resources it can employ to create, grow, and retain
a competitive advantage in the marketplace. The first is the company's high-profit margin in
comparison to its competitors in the aviation business. Although China Southern Airlines' profits
are declining, it still has a better profit margin than its competitors. The second reason is that
China Southern Airlines has a significant market leadership position in the aviation industry. It
aided the corporation in scaling up a successful new product swiftly. Then there's the extensive
geographic reach. China Southern Airlines has a large network of agents and affiliates that allow
the airline not only to deliver excellent service to consumers but also manage competitive issues
in the industry (csair, 2020).

Weakness

China Southern Airlines' shortcoming may be that it lacks the strength or resources to do the
essential skills, which the company currently lacks. Leaders must determine whether their
weakness stems from a lack of strategic preparation or a strategic decision. Companies like
China Southern Airlines can tap into niches and local oligopolies that are gradually fading. China
Southern Airlines' customer network is becoming increasingly ineffective. Competitors in the
aviation industry can readily copy China Southern Airlines' business model. To overcome these
obstacles, the organization will need to develop a platform model that would allow vendors,
suppliers, and end-users to work together. China Southern Airlines is likewise concerned about
personnel turnover in the top levels of the organization. It may result in greater wages to keep
employees in the organization (Embapro, 2022b).

Opportunities

Growth, profitability, and market share are examples of potential areas where a corporation can
capitalize. Increasing government rules are making it more difficult for unorganized aviation
enterprises to operate. China Southern Airlines may be able to expand its consumer base as a
result of this (csair, 2020). Customers' proclivity to migrate to more premium products. This is a
fantastic opportunity for China Southern Airlines, as it already has a strong brand name in the
high-end market, and customers in the lower-end segment can benefit from the exceptional
customer care given by China Southern Airlines brands. It has the potential to be a win-win
situation for the organization, as well as an opportunity to grow profits (csair, 2020). Rapid
technical breakthroughs are increasing industrial productivity, allowing suppliers to produce a
wider range of goods and services. As a result, China Southern Airlines may be able to
participate more actively in adjacent products (csair, 2020).

Threats

Threats are variables that, as a result of changing macroeconomic conditions and changing
consumer attitudes, may constitute a threat to an organization's business model. Threats can be
addressed, but they can't be eliminated. The first is a scarcity of qualified personnel. Companies
may confront skilled human resource issues shortly due to high staff turnover rates and a
growing reliance on new solutions (csair, 2020). The second factor is the shifting political
environment, which includes the US-China trade war, the impact of Brexit on the European
Union, and the broader volatility in the Middle East, all of which could influence China Southern
Airlines' domestic and international operations (Embapro, 2022). Finally, enhancing domestic
enterprises' technological knowledge in the export market. The risk of losing intellectual property
rights is one of the major concerns for China Southern Airlines when it comes to sticking with
domestic enterprises in the export market. In emerging nations, particularly China, the
intellectual property rights framework is weak (csair, 2020).

3. An Analysis Of Changes That Affect Organizational Behaviors And Their Reactions

3.1. The Changes of the business

3.1.1. Vietjet Air

Amid the pandemic, Vietjet airline reported revenue of 1,970 billion VND for air transport
services, down 54 percent, and an airline loss of 1,122 billion VND at the end of the second
quarter of 2020. Vietjet lost 2,111 billion VND in aviation activities in the first six months of the
year, which was considered a good result given the global aviation industry's record loss of more
than $84 billion. To increase cash flow to support business operations, Vietjet actively sought
partners and implemented solutions to transfer assets and financial investments in the second
quarter of 2020, resulting in an increase in financial revenue of 1,174 billion VND, consolidated
profit after tax of 1,063 billion VND, and increased support resources for air transportation
services (Vietjet, 2020b).

Vietjet has been aggressively implementing cost-saving programs, with an average cost
reduction of 55% due to the decrease of over 30 flights, with the advantage of cost optimization
following the growth model of LCC airlines throughout the world to 35%, as well as a 20% to
25% reduction in unit cost. Vietjet successfully developed a scheme to buy and stockpile fuel
during the low-price period, reducing costs by 25% compared to the market, especially in May.
Furthermore, Vietjet engages in active negotiations with suppliers to cut rates for port, airport,
engineering, and other services by 20% to 45 percent, depending on the provider (Vietjet,
2020b).

Vietjet has always actively applied commercial solutions based on 4.0 technology, building
mobile apps, with the goal of emerging into a new generation airline. Vietjet exhibits its efficiency
when operating under the LCC model, which has been and always has been effective when the
economy has gone through periods of economic crisis, thanks to its capacity to optimize costs
based on technology (Vietjet, 2020b).

Vietjet has launched a series of drastic remedies from the beginning of 2020 till now,
proactively ahead of Covid-19 response plans, such as growing freight business services,
producing SkyBoss products and services, supplementary services, Power Pass flying cards...
In addition, the airline launched self-service ground operations at Noi Bai airport to take the lead
in operational activities, boost ancillary charges at the airport, and improve customer service
quality. Vietjet, in particular, has deployed a number of solutions to boost revenue and improve
operations. In April, Vietjet launched its cargo transportation service (cargo), making it the first
airline to be permitted to operate an in-cabin freight operation (CIPC). In order to reduce
operational expenses, the airline has improved charter services and increased ground self-
service at Noi Bai International Airport (Vietjet, 2020b).

It is clear that Vietjet's transportation, financial, and business outcomes are excellent, and it is
among the region's and world's leading airlines.

3.1.2. China Southern Airlines

Faced with concerns such as the global trade slump and de-globalization, the foundation for
global economic recovery remains shaky, China Southern Airlines aim to open up the most
important artery and prevent it from closing. China's civil aviation industry's microcirculation and
provide more to the major development model The Group must collaborate development with
safety, trying to implement the Company's overarching plan of the high-quality development
process to ensure a peaceful and reliable situation and push for excellence organizational
effectiveness, while accelerating the advertising of important strategies and important reform
tasks, with the theme of promoting high-quality development, reform, and innovative thinking as
the foundational motivating factor (csair, 2020).

The first business adjustment is to prioritize safety and strengthen management to mainstream
pandemic prevention and management. The group will run a three-year project to improve safety
production as the mainline, and to construct system safety as the key point, to strengthen
various systems, strictly improve working style, and identify areas for improvement safety quality
(csair, 2020).

The next step is to improve quality and efficiency as soon as possible to improve business
performance. The company monitors the global epidemic set of circumstances and changes in
the air transport industry, improves its analysis and judgment, and adapts its marketing
strategies as needed to continuously develop quality and efficiency. China Southern Airlines
plans to boost domestic transport capacity and deepen hub construction, particularly in
Guangzhou and Urumqi, with a concentration on the Beijing Daxing hub. To enhance the overall
margin of contribution, the company will improve routes and flights and guarantee that capacity
is in line with market demand. China Southern Airlines would do everything possible to extend
flight times and strengthen international flights (csair, 2020).

The emphasis on lean management and control, as well as increasing risk resistance, is the
third. The Group will establish a long-term process for lean management and financial control,
as well as a firm foundation for continued growth resilience. Enterprises will select key projects
for benchmarking based on cost; tight control of key costs such as aviation fuel, take-off and
landing, maintenance, and decrease of crew operational costs and unnecessary maintenance
costs; expand financial channels to achieve diversification, low-cost sources of finance, and
further improve debt structure; assertively innovate capital activities and build a mechanism on
the term of convertible bonds; consciously innovate capital activities and build a mechanism on
the term of government debentures (csair, 2020).

Finally, accelerate technological change and provide quality development a new drive. The
Corporation will actively push technology innovation, deepen cloud platform and dual middle
platform construction, grasp technology development prospects such as data and 5G, and
upgrade the IT system at the same time to strengthen core competitiveness. With a focus on
"food, accommodation, transportation, enjoyment, travel, and shopping," the company will build
technologies, find a new partner, activate point membership fees, increase marketing
automation redirects, and implement seamless integration as a means of enriching advertising
and other promotional systems, as well as building the CSA ecosystem (csair, 2020).
China Southern Airlines will endeavor to transform its group into a global, competitive
international air transportation company. From there, it shows that China Southern Airlines is
trying to change and perfect itself to overcome this COVID-19 pandemic.

3.2. These changes affect organizational behaviors

Organizations, including leaders, teams, and individuals, will all be affected by the severe
changes stated above and will respond to all those changes in multiple ways. This will all be
investigated using the Change Cycle model to examine the effects on these three types and
their reactions/emotions in the face of challenge in both organizations in greater detail (Craine,
2007).

The Comfort Zone

Leaders, organizations, and individual employees at Vietjet and China Southern Airlines, who
do not have to deal with major changes in macro variables and remain unchanging in their
businesses, can be considered to be staying in the comfort zones. To put it another way, all
three of these organizations felt in charge of their work and confident in their ability to deal with
any circumstance that happened (Craine, 2007). Staff of Vietjet and China Southern Airlines
were still working and operating properly before the shift. They perform admirably in their
respective jobs and responsibilities. However, Businesses, including leadership, teams, and
employees, will all be affected by the severe changes stated above, and will respond to all those
changes in multiple ways. This will all be investigated using the Change Cycle model to examine
the effects on these three types and their reactions/emotions in the face of change in both
organizations in greater detail (Craine, 2007).

The “No” Zone

When individuals are compelled to abandon their comfort zones, they frequently exclaim, "No".
The "No-Zone" encompasses everything from the start to the finish of things as they have
always been, and is marked by a variety of reactions. The first is astonishment. When Vietjet
and China Southern Airlines employees learn of a change in their work lives, they are typically
psychologically paralyzed, which impairs their performance. Then there's denial. Employees can
become enraged, and one enraged employee can affect everyone else. An employee's rage can
take the form of resentment, irritation, or destruction. People may resent someone who disturbs
their sense of security. They may have a covert enmity for those in power and be frustrated that
their power has eroded. By doing nothing, hoarding information, or spreading false information,
they can become passive, aggressive, and subtly destructive. The "No-Zone" is a period of
intense emotion during which resistance to change is at its highest (Craine, 2007).

The Chasm

The people in "The Chasm" are stuck in limbo. This is the point at which employees from both
organizations begin to rethink their minds because they recognize that change is unavoidable
and that they can't go back in time, but they are still unsure whether they can not to accept the
change. The leaders of Vietjet and China Southern Airlines must develop a future vision and
communicate it to their staff. Now is the optimum time to guide the employee through the
acceptance chasm. When their thinking is "wavering," the leaders of Vietjet and China Southern
Airlines must define a vision for the future and then devise precise measures to attain that vision.
Employees require a clear plan for the future at this time. They aren't inherently opposed to
change, but they haven't fully committed to it either. For example, while integrating technology
into the planes, Vietjet leaders must inform employees of the benefits to employees and their job
efficiency.

The “Go” Zone

When folks are in the "Go Zone," they are fully prepared to work. Employees will eventually feel
accepted with a certain level of expectation if they have adequate time and assistance in the
process of working in the earlier stages. Employees that have reached this level will be
enthusiastic about the change and eager to put it into practice once they have grasped the
benefits it can provide to them personally and to the company. Airline employees on Vietjet who
have previously worked in a crisis believe that the job of moving products rather than servicing
passengers remains appropriate (Vietjet, 2021). Staff at China Southern Airlines will be
enthusiastic about the company's reform goals throughout this time and will begin making
contributions to the company (csair, 2020). When workers are enthusiastic to come to work,
leaders must continue to motivate them by recognizing and praising their new accomplishments.
This is regarded as critical in guiding individuals in the organization through change and leading
to organizational development productivity (Craine, 2007).

4. Recommendation

In the literature on change management, Kotter's eight-step change paradigm is a prominent

exemplar. The model outlines a method for successfully managing change while avoiding the
traps that plague failed change initiatives (Kavanagh & Thite, 2009). Kotter lays forth an eight-
step process for directing change, with leadership at the center. Based on his many years of
research, Kotter (2012) has established the 8-Step strategy for managing change, which
improves firms' performance in a constantly changing world. Once a business needs to change,
it seems like an innovative way of change. The three titles for these processes are "generating-
consolidating-anchoring."

Step 1 – Establishing a sense of urgency

The first stage of the transformation process emphasizes a growing sense of urgency and the
need for collaboration. It's difficult to persuade important personnel to join in a change process
when the urgency is low, and without incentive, the endeavor will fail. This first phase, according
to Kotter, is critical since getting a change management program off the ground necessitates the
aggressive participation of many employees, and he claims that half of the organizations he
studied failed in the first stage ( Kotter, 1995). Leaders of Vietjet and China Southern Airlines
must have a clear understanding of the industry's highly competitive environment, current world
digital innovation, and company performance to predict associated consequences if they do not
change. Leaders will also converse the urgency of the change to the staff so that they are aware
of the company's current and future change needs. Only if they comprehend this will they be
able to work together to bring about successful company change. For Vietjet, for example,
management must communicate to employees the cost-cutting initiative in which the company
has obtained low-cost components to serve the company's flights shortly. As another example,
management at China Southern Airlines needs to remind employees to keep an eye on the
global epidemic situation and changes in the air transportation industry to improve analysis and
judgment, as well as adjust the marketing strategy as needed to maintain quality and
effectiveness.
Step 2 – Building the guiding team

While the change in business practices is commonly referred to as organizational change,

according to Kee and Newcomer, change is not truly organizational until it is preceded by
individual and then team transformation (Kotter, 2008). Major renewal projects, according to
Kotter, often begin with just one or two people, and in the event of successful transformation
attempts, the leadership coalition gets even larger (Kotter, 1995). To ensure the success of the
transformation of Vietjet and China Southern Airlines, the leaders of these two businesses must
understand the human perspective so that they can select a leadership coalition to manage the
company's change process. They must find people who have the potential to help them increase
their ability to transform their business and take it to a new level of success.

Step 3 – Creating a vision

A vision says something that helps clarify the direction in which an organization needs to move,
and it refers to a picture of the future with some explicit or implicit commentary on why people
should strive to create that future. Furthermore, vision motivates people to take action in the
appropriate direction, and it helps change managers coordinate activities of different participants
(Kotter, 1995). Kee and Newcomer discuss the leader’s role in transformation and mention that
effective leadership requires a vision-oriented approach, rather than goal-directed (Kotter, 2008).
Effective visions are focused enough to guide decision-making yet are flexible enough to
accommodate individual initiative and changing circumstances (Kotter, 1998). As a result, for the
company's transition to making it simpler for employees to adjust to work, the two organizations'
leaders must provide organization personnel with a clear aim that they can comprehend and be
encouraged to work.

Step 4 – Communicating the vision

Employees will not make compromises, even if they are dissatisfied with the status unless they
believe that beneficial change is possible (Kotter, 1995). Furthermore, a vision's true power is
unleashed only when the majority of people share a similar understanding of its aims and
directions. Failures in visual communication are frequently attributed to lower-level employees'
inability, a basic human tendency to resist change, and hence, resistance to accepting change
information (Kotter, 1996). Enterprises should hold weekly meetings amongst department heads,
which will increase employee confidence in the leadership's abilities while also improving
employees' ability to embrace change. As a result, for employees to accept and adapt to
business changes rapidly, Vietjet and China Southern Airlines management must improve
communication in an exchange with staff so that they can trust the company's
decisions enterprise.

Step 5 – Empowering the action and removing obstacles

Step five's major goal is to empower a large number of individuals to take action by removing as
many barriers to the change vision's execution as possible (Kotter, 1996). Structures that stifle
change should be addressed, people should be trained in project-specific skills and attitudes,
information and personnel systems should be aligned with the vision, and supervisors who
hinder the change effort should be confronted.

Step 6 – Creating short term wins

Because true transformation takes time, short-term goals and victories help maintain momentum.
People are more likely to give up or become change-resistant if they don't see immediate results
(Kotter, 1995). The short-term gains should be unambiguous and apparent, and they should be
tied to the transformation effort. Employees are put under more pressure to achieve short-term
victories, which reduces their commitment to the change endeavor (Kotter, 1996).

Step 7 – Consolidating improvements

After the attractiveness of quality management, leadership can take the moral high ground;
however, this is a relatively brief benefit that the business achieves, and the supervisor must use
this advantage to resolve issues such as processes and institutions which have not been
appropriate for the changes that have been incorporated (Kotter, 1995). In order to consolidate
improvements, Kotter (1998) proposes a number of actions, including increasing credibility to
change systems, structures, and policies that do not align with the vision; hiring, promoting, and
developing employees who can implement the vision; and giving the process a boost with new
projects, themes, and change agents.

Step 8 – Anchoring new approaches in the culture and making change stick
Employees' common ideals and behavioral conventions are referred to as culture. It's not easy
to integrate fresh approaches into established cultures. The widespread notion is that a
successful transformation endeavor begins with a shift in organizational culture. Change, on the
other hand, occurs last, not first (Kotter, 1996). When a new style of conducting business
becomes the norm and permeates into the organization's bloodstream, the shift becomes a
culture. Two important factors in institutionalizing a change in corporate culture, according to
Kotter (1995), are making a conscious effort to demonstrate the importance of new approaches,
behaviors, and attitudes that helped improve performance, and establishing a promotion system
that moves people to the next generation of top management who truly personify the new
approach.

III. Conclusion

In conclusion, this report used PESTLE and SWOT analysis to examine the internal and external
environments of two organizations, Vietjet and China Southern Airlines, that have been
substantially impacted by the Covid-19 epidemic in 2020. As a result, recommendations are
made to alter the competitive interests of market companies and adapt to the market's ongoing
changes. Corporate leaders, in especially, need change management abilities and the ability to
encourage their people to accept organizational change to enable the business to continue
developing in this difficult environment.
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