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CEO WORLDTRANS "TURN RISK INTO OPPORTUNITY DURING THE COVID-19 PANDEMIC"

July 15, 2020

World Transportation Joint Stock Company (WorldTrans) is a member of Vietravel Group, in charge of air transportation for the entire Vietravel system. Together with hundreds of businesses in the travel and aviation sectors suddenly suffered the "storm" of Covid-19, WorldTrans was shaken, then got up and continued to survive the crisis and found new opportunities for themselves.

Mr. Vu Duc Bien - Vietravel's Deputy General Director cum CEO of WorldTrans shared his journey to find "light at the end of the tunnel".

Mr. Vu Duc Bien - Vietravel's Deputy General Director cum CEO of WorldTrans at the company's headquarters in District 3, Ho Chi Minh City.

- How does Covid-19 affect WorldTrans?

- Covid-19 has had a heavy impact on businesses, of which airlines and travel are first and directly affected. The huge damage caused the shipping companies to suffer and fell into an unprecedented crisis.

WorldTrans has three main fields of activity. The first one is to provide airline tickets to customers with an airline ticketing platform with revenue of trillions of VND per year, connecting with more than 50 domestic and foreign airlines. The second one is to provide a package solution for business customers from airline tickets, hotels, visas, package tours, resorts, seminars, conferences ... in Vietnam and abroad. The third one is to rent a charter flight for customers who want to travel to different domestic and international destinations with more than 500 flights annually.

We set the average target of sales revenue in 2020 about 3,300 billion VND, which means that each month, we have to collect nearly 300 billion VND. But in January, almost as our plan, the company achieved revenue of 293 billion VND.

When Covid-19 arrived, the revenue in February was 50 billion VND; March and April decreased to 95% when the whole country implemented the social distancing, the travel demand was almost zero. This is the reduction and "big shock" effect of WorldTrans ever.

- Specifically, how damaged does the airline ticket sales, which contribute trillions of dong each year to WorldTrans?

- At the time of the pandemic, all airlines in Vietnam as well as in many countries around the world stopped operating. During the 3-week social gap in April, nearly 200 airplanes in Vietnam stay on taxiways, aprons, and aviation activities decreased by 95% compared to before. Countries close borders almost entirely, except for a few diplomatic flights, business flights or special flights ...

The WorldTrans ticketing platform that serves many travel companies and retail customers has been "frozen" by the direct impact of the Covid-19 pandemic.


"It's not a failure! All is a challenge" is the favorite book of Mr. Vu Duc Bien, because the message "turn risk into opportunity" and has been used flexibly in his journey of running WorldTrans.

For such a sudden impact and a huge drop in sales, the company quickly deployed a "wartime" response scenario.

Accordingly, the company has balanced the reserve fund to make a financial plan until the end of the year in the worst scenario. At the same time, employees are defined as the core of the business, regardless of circumstances, not a single employee is left behind. The spirit of solidarity and unanimity reached its peak, all staff supported each other.

- In the first quarter, the company plans to have about 170 charter flights to Japan, Bhutan, India, Korea ... But all of these flights cannot be operated due to the influence of the Covid-19 pandemic.

However, WorldTrans still finds opportunities to ensure the transportation needs of people from abroad to Vietnam and Vietnam to other countries. When there is a restriction on commercial aircraft travel by airlines, there is a chance of charter flights.


As a market leader in the field of charter flights in Vietnam, the company has organized about 20 flights to bring international students and workers to Korea ... Shortly, the company will also carry out some flights for citizens back to India. This activity partly solves the demand and will brings income to the company.

- Why did the company set up more freight shipping at this time?

- Although Covid-19 has a heavy impact on many aspects of society, we think that this is the "Golden stage of Cargo flights" because of the huge demand for cargo transportation.

During the pandemic, airlines stop regular flights, but the demand for shipping of medical equipment, food and goods between countries is huge. Without cargo flights, it would inevitably disrupt supply chains for essential goods. So WorldTrans decided to focus on cargo services - Cargo Charter.



Cargo flight to Europe was operated by WorldTrans on the morning of 12/5.

Cargo flight on the morning of June 1st, carrying goods to the Americas, opened the WorldTrans' chain of 18 flights to Europe and the US in June. Along with the signing of a contract worth 260 billion VND to transport goods to other countries, WorldTrans has almost completed the first 6 months' plan.
 

- What are the responses of WorldTrans to the pandemic?

- WorldTrans has given three scenarios to deal with as soon as the Covid-19 pandemic happens.

The first scenario: to reduce costs, at the end of January and early February, WorldTrans proposed a "hibernation" plan (March-June), promoting training activities. However, the company is still operating normally, but in the online form, revenue reached 35% of the plan, cost decreased by 65-70%.
Second scenario: 50% recovery (June-August), possibly 90% of revenue expected.

Although given the response scenarios, but from the beginning of May, WorldTrans has "woken up" and recovered from mid-May. Expectedly, if Cargo operation is good, to June, maybe revenue and profit The company will almost recover 100% due to good Cargo performance.

Third scenario: 100% recovery (September-December). If some of the countries opened up internationally then WorldTrans would return to 100% of operation.

On the other hand, the company will accelerate the Cargo operation to ensure revenue and profit from this service to 150% in the fourth quarter.

However, all scenarios always change according to the situation. In fact, we recovered earlier than expected. However, WorldTrans still reserves the fourth scenario when the Covid-19 development can be worse than the present, by being proactive on strategic issues.

- What position is WorldTrans in Vietravel Group's ecosystem?

- I realize that, in an enterprise, there should be different ecosystems. In the ecosystem of Vietravel Group, Vietravel specializes in developing tourism; WorldTrans is in charge of transportation and whole-trip solutions for Vietravel; Vietravel Airlines operates air transportation ... The elements in the ecosystem support each other, forming a solid foundation.

- If you share about the bright side that you find yourself in the pandemic, what will it be?

- During a pandemic, the company has the opportunity to review the strengths and weaknesses, and then offer comprehensive restructure solutions. At the same time, the managers also see that a solid financial source is essential to bring the business through the pandemic.

Covid-19 creates an opportunity for the company to develop new types of products: launching the Cargo business, initially attracting attention and success with many large signed contracts. Management also recognizes product linkages with partner companies. Specifically, we signed a cooperation contract with Bao Minh Insurance Company to cross-sell products, also obtained positive results.

The recent crisis days have proven that building a good corporate culture is the key to helping the company survive, overcome all challenges, even if it is an unforeseeable event.


WorldTrans is optimizing the performance of the departments to reduce costs but retains employees.

We're in the same way, all members looked ahead with confidence. In the last Covid-19 days, the company's union set up a fund to support employees who are in difficulty. We not only share together we also actively participate in community activities. The company has conducted two charities with a total value of more than 140 million VND at social distancing points in Nha Be, Cu Chi, together with the Government and the Ministry of Health to prevent the pandemic.

WorldTrans gives thousands of gifts to the medical team and doctors at the 2nd Field Hospital in Nha Be district on April 5.

Another sharing is that in a crisis, the speed of decisions needs to be made decisively, quickly and neatly with foresight. With Covid-19 passing, WorldTrans not only existed but also evolved. Management expects that, with drastic solutions, WorldTrans will become a bright spot in its service industry, successfully overcoming the crisis.
 


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