At 0:00 on 7/5/2020, the Government's new guidelines for COVID-19 prevention and control in passenger transportation services took effect; therefore accordingly lifting all social distancing restrictions on transportation and limitations on the number of passengers in passenger transportation (bus, taxi, coach, train, plane, and ships). For the heavily affected victim of the pandemic - the aviation enterprises, this is such a good news. Yet there are more actions that one could take at this moment so further relieve the burden on the wings.
The outbreak of the COVID-19 pandemic has been putting airlines in dire circumstances. Social distancing helps governments to control the outbreaks, to protect public health, but as a matter of fact, this method also makes airlines severely affected with the drastic drop in the number of domestic passengers. Additionally, with many countries applying measures to tightly control or close the border since early this year, aviation companies have no choice but to reduce the number of international flights to various regions such as Northeast Asia, Northern America, or Europe.
With a few passengers on board, aircrafts lining up at the airports, and empty gloomy terminals, aviation enterprises are painfully bearing the costs of renting or buying aircraft, warehouses, salaries for both the fleet and ground workers, maintenance costs, maintenance ....
In a recent report to the Prime Minister of the Ministry of Transport, companies in this industry may suffer losses of around VND 30,000 billion. Specifically, Vietjet Air, in the first quarter 2020 financial report, reported a negative profit of VND 989 billion, with a revenue decrease of about 29.1% over the same period. This is also the first time this budget airline recorded a quarterly loss since listing.
Meanwhile, in the first three months of the year, Vietnam Airlines recorded a net loss of VND 2,611.5 billion. To simply put it, the national airline's record loss is higher than its total profit for the whole year of 2019 (its net profit last year was 2,500 billion dong). This hardship is so massive that, the airline’s CEO Mr. Duong Chi Thanh admitted he would never imagine one day, as the leader of the national airline, he had to personally count the number of passengers using the airline’s services.
Industry forecasts in the coming period, consequently, are not very positive. Based on the ongoing development of strict restrictions on travel between countries, the International Air Transport Association (IATA) offers gloomy scenarios; such as full-year passenger demand, or revenue passenger kilometers (RPKs) to decline by 38%, and annual passenger revenue will drop by about 250 billion USD compared to 2019. IATA's director, Alexandre de Juniac, also added that air transport business enterprises there will be at risk of burning about 61 billion USD of cash reserves in the second quarter, when the net loss has reached nearly 40 billion USD every quarter.
The financial challenges and the not-so-bright future pictures have forced these businesses to make difficult choices in terms of human resources. Vietnam Airlines has been forced to lay off 10,000 employees on the ground and its crew, while many other airlines have to cut 50% to 80% of their staff. Those who are retained, of course, will receive reduced wages.
Clearly, the aviation industry is one to take the biggest casualties from COVID-19. Yet the more heavily affected, the more enterprises in this industry should make an appearance and speak up through the media.
Through the distribution of the official Press Release, airline leaders can timely inform the public about new regulations such as changing seat positions, limits on ticket sales, or promotions and incentives post COVID-19 season.
Besides, publishing through official media outlets is also an effective method for aviation companies to communicate accurately, clearly, and transparently with stakeholders related to the overall situation of the industry and the situation in their own company, thereby they can propose some measures for damage control such as rent reduction.
In addition, as we have analysed and concluded that a press release is an effective way of sincerely conveying the message to the employees. As big corporations have done this in the past, through “a letter to our employees”, the corporate can share coherently about the current circumstances, the standing obstacles, the calculated losses, and the recovering status from the recession. Furthermore, the press release can assure and indeed motivate the employees that they are still in good hands; and inform them of the upcoming changes in C&B policies and other regulations.
In particular, the managers of the airlines can propose to the authorities and the policy makers issues regarding reducing taxes, fees for businesses in the industry, lowering environmental tax, import tax with jet fuel, freezing principal debt, restructuring debts, increasing short-term credit limit for businesses ..., to reduce costs in the context of continuous revenue decrease.
For aviation businesses, distributing an official press release at this time isn’t merely openness. The voice raised in time will save thousands, in this case, might bring more benefits that will help the business during the time of crisis.
TIPS FROM US
CREATIO has compiled some suggestions for simple, necessary and proactive actions at the present time, things that can be applied immediately, so as for aviation enterprises not to lose competitive advantage during COVID-19.
TIP 1. BE TRANSPARENT
Sharing information about the company in a transparent and accurate manner is the number one priority at the present time. Aviation businesses should not hide difficulties, nor should they exaggerate the losses that they are suffering. Airlines should also publish COVID-19 Safety Operational Measures and a contingency coordination tool on their own media. This is to build an image of a positive, agile, and social-responsible business.
TIP 2. COLLECTIVE ACTION
Crisis is a time when business associations and unions of enterprises in the same industry fortify their roles. Actively participate in opinion polls, statistical surveys and contribute to industrial associations to ensure that you are sharing your positioning through reputable representative organisations, and you are not fighting this battle alone.
TIP 3. ENHANCING DIALOGUING WITH THE GOVERNMENT
The continuous dialogue with the authorities is of great significance to the aviation companies, as it will create a good momentum for these firms to accelerate in the recovery process.
In fact, Vietnam Airlines has proposed to the Government, ministries, departments and the Civil Aviation Administration of Vietnam a plan to reduce 50% of the cost of landing, taking off and flight control during the pandemic. The Ministry of Transport is also reporting the situation to the Prime Minister on the current situation of the transport sector, and at the same time proposing measures for the aviation industry, such as rescheduling payment periods, continuing to lend to increase working capital, or submitting to the Government plan to subsidise firms in difficult times.
TIP 4. CORPORATE SOCIAL RESPONSIBILITY (CSR)
Despite the difficult situation of the pandemic, it is time for airlines to consider deploying programs for the community.
Resources that can only be provided by the aviation industry (transporting essential goods, medical supplies, especially the repatriation of thousands of Vietnamese expats stranded around the world by travel restrictions) are among those that can only be provided by airlines companies. The establishment and implementation of community relations policies in a timely manner, during the pandemic crisis, can help companies build a responsible and sustainable corporate brand image.
Established in 2011, CREATIO has proven its position and expertise in the industry of creative communications solutions consultancy. With a broad range of services from event management, branding design and production, to content marketing and PR distribution, CREATIO has the privilege to serve more than 120 clients worldwide, from a singular design concept to year-long integrated communications campaigns. Some past projects that you can refer to on this expertise of Press release distribution to enhance brand power include the client ROSTEC (Russian State Corporation for Assistance to Development, Production and Export of Advanced Technology Industrial Product) and the press conference held during the official visit to Vietnam of Russian Prime Minister Dmitry Medvedev. CREATIO was honoured to be the communication representatives of the delegation of the Ministry of Industry and Trade of Russia and held a press conference with the Minister of Industry and Trade of the Russian Federation Denis Manturov and President of the United Aircraft Corporation (UAC) Yuri Slyusar before the flight experience on the very own Sukhoi Superjet 100 that UAC brought to Vietnam. Moreover, CREATIO had the honour to organise a press tour to Moscow to MAKS International Aviation and Space Salon 2015, to visit the facilities of ROSTEC and a press interview with the CEO of ROSTEC, Mr. Sergey Chemezov.
During the COVID-19 era, when aviation businesses thought about closing, Amazon has been acting in stark contrast. They are now buying aircraft from other carriers, to expand its cargo fleet at a time of constrained supply, thereby increasing corporate resources in this difficult time. These planes are used to transport goods, thereby contributing significantly to Amazon's 34% growth in the stock market.
CREATIO has had the opportunity to cooperate with Amazon Web Services (AWS) - a subsidiary of Amazon - the world's most valuable brand for 3 consecutive years, as the organiser of AWS DeepRacer race at TechFest Vietnam 2019. This is the world's first global autonomous racing league, having taken place in 35 countries, but 2019 was the first time it was introduced in Vietnam.
With experience in providing services to international partners, multinational corporations such as ROSTEC, Sukhoi, or Amazon, CREATIO is confident to become a reliable consulting firm in media solutions for domestic and international airlines.