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Vietnam aviation authority proposes increase in service charge

Thursday, November 17, 2016, 17:09 GMT+7

The Civil Aviation Authority of Vietnam (CAAV) has proposed an increase in the prices of aviation services in 2017, which would mainly affect passengers of domestic flights.

The proposal was submitted by the Airports Corporation of Vietnam (ACV) under the CAAV to the Ministry of Transport, which is considering it.

A 15-percent hike in domestic runway services was requested to be applied to Category B airports across Vietnam, including those in the central province of Thua Thien-Hue, Buon Ma Thuot and Pleiku Cities in the Central Highlands, the Phu Quoc tourist island, and others.

Service charges at Category A airports, such as Tan Son Nhat in Ho Chi Minh City, Noi Bai in Hanoi, Da Nang in the namesake city, and others, will be equal to 115 percent of that at Category B equivalents.

The new price at Category C airdromes, namely those in the southern province of Ba Ria-Vung Tau, the northern province of Dien Bien, and Ca Mau and Kien Giang in the Mekong Delta, will be about 60 percent of that at Category B airports.

Accordingly, passengers of domestic flights will pay an extra VND20,000 (US$0.89) to VND30,000 ($1.33) for their aviation services if the plan is approved.

According to Lai Xuan Thanh, head of the CAAV, the cost of runway services at Vietnamese airports has been kept unchanged in the past five years, which is only between 32 and 72 percent of that in other ASEAN member nations.

ASEAN is short for the Association of Southeast Asian Nations, which is a political and economic organization whose members include Brunei, Cambodia, Indonesia, Laos, Malaysia, Myanmar, the Philippines, Singapore, Thailand, and Vietnam.

The price has to increase by 225 percent to break even, and by 258 percent to achieve a 10 percent profit, the ACV elaborated.

With the current policies, the ACV cannot gain a stable profit, which could be used to upgrade its infrastructure and service quality, said Le Manh Hung, general director of the corporation.

The CAAV leader, Thanh, considered the added cost reasonable, noting it has to ensure the harmony between the ACV’s infrastructural development and airlines’ operations.

“Despite the rise in service charges, airfares should not be raised, meaning carriers have to readjust themselves to adapt to the new service cost,” Thanh explained.

The service fee for domestic flights is also rather low compared to that for international routes, the official stated, adding that the ACV has used its profit from international flights to compensate for the losses from domestic journeys.

According to Deputy Minister of Transport Nguyen Nhat, the proposition will be thoroughly reviewed, with the interests of airlines and passengers to be taken into careful account.

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