All service providers in aviation industry make profits: CAAV

Business news

All service providers in aviation industry make profits: CAAV

8/12/2016 8:38:00 AM

 Lai Xuan Thanh, head of the Civil Aviation Authority of Vietnam (CAAV), said the agency would still consider adjusting the price and service fee.

vietnamnet bridge, english news, Vietnam news, news Vietnam, vietnamnet news, Vietnam net news, Vietnam latest news, vn news, Vietnam breaking news, Vietnam Airlines, ACV, service fee, air petrol
The Airports Corporation of Vietnam (ACV) has sent a dispatch to the Ministry of Transport (MOT), asking for permission to raise the price and fee on aviation services.

The airport fee, for example, has been proposed to rise from VND70,000 to VND100,000 per passenger, commencing from January 1, 2017. ACV also attempts to the raise the fees on take off/landing, parking and other services that airlines have to pay.

Explaining this, ACV said the investment rate for every parking lot at the airport was VND4.57 billion a year, while it now can collect VND162-192 million only.

ACV has also proposed raising other kinds of fees so as to be able to take the investment capital for re-investment to satisfy the airlines’ very rapid output increase and to attract investments into airports.

The required capital will be VND1 trillion if airlines plan to use 11-30 aircraft and provide international flights, and VND600 billion if they only provide domestic air transport services.

It also said that the state now subsidizes input costs for domestic airlines by offering preferential prices, and since ACV is the service provider, it has to incur the costs.

CAAV’s Thanh said that adjusting the aviation service fees was ‘a must’, but said CAAV would still have to consider the situation and consult with agencies before submitting a feasible plan to MOT.

Thanh commented that in a market economy, the production cost will truly reflect service quality.

“Many people say it is unreasonable that air transport is cheaper than railway,” he said.

However, Thanh denied that the airlines received a subsidy from the state.

“All the units in the aviation sector, except enterprises which have just joined the market. can make profits, from infrastructure developers to air carriers,” he said.

Meanwhile, MOT’s Deputy Minister Nguyen Nhat commented that the domestic air service fees have been stable for many years and there are some services which have had the same fees for 10 years.

Therefore, Nhat said MOT would consider the proposal thoroughly.

In related news, the government has issued a decree stipulating the minimum required capital an airline must have.

Airlines will have to have VND700 billion at least to be able to exploit up to 10 aircraft and provide international flights. Meanwhile, they only need to have VND300 billion if they only provide domestic air transport services.

The required capital will be VND1 trillion if airlines plan to use 11-30 aircraft and provide international flights, and VND600 billion if they only provide domestic air transport services.

The figures will be VND1.3 trillion and VND700 billion, respectively, for airlines with more than 30 aircraft.
Views: 850