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Vietnam’s aviation watchdog mulls service fee hikes

Vietnam’s aviation watchdog mulls service fee hikes

Friday, March 24, 2017, 18:02 GMT+7

The Civil Aviation Authority of Vietnam has submitted a proposal to the Ministry of Transport, seeking permission to increase landing and takeoff fees for airlines, as well as several passenger services.

Presently, airfares usually include a ‘passenger service fee at airports,’ which the airlines collect from flyers on behalf of the airdromes when selling tickets.

The current fee for passengers at Category A airports is VND70,000 (US$3.13) per person and VND60,000 ($2.68) per person for Category B airports.

The CAAV proposal suggests hiking these fees to VND90,909 ($4.06) and VND72,727 ($3.25), respectively.

Category A airports include the country’s top airfields – Tan Son Nhat, Da Nang and Noi Bai, whereas smaller airports, such as Lien Khuong, Buon Ma Thuot, and Tuy Hoa, fall in Category B.

The CAAV also proposed hiking the ‘airport security fee’ from $1.5 to $2 per person for passengers on international flights, and from VND9,090 ($0.41) to VND18,181 ($0.81) for domestic passengers.

The fee covers such services as baggage screening and airport and aircraft security.

In the same proposal, the CAAV also called on the transport ministry to charge airlines different fees for landing and takeoff, depending on whether their flights are scheduled for rush or off-peak hours.

The proposal recommended that the fee for flights during rush hour should be 15 percent higher than normal rates and 15 percent lower during off-peak hours.

Currently, all flights are charged the same fees, a structure that has been in place since December 2011, CAAV chief Lai Xuan Thanh said, adding that it is outdated.

“The landing and takeoff service fees for domestic flights in Vietnam are only between 47 and 68 percent of Southeast Asia’s average rates,” Thanh added.

‘No burden for passengers’

The proposed fee increases will take the heaviest toll on passengers, who will eventually be forced to cover all extra costs.

However, the Airports Corporation of Vietnam (ACV), which manages all civilian airports in the country, has said the fee hikes will cut the state budget allocation for countrywide airports.

The ACV said the fees paid by domestic passengers are too low, only 14.81 percent compared to those charged on international flyers.

Citing 2015 figures, the company said 21 airports under its management raked in only VND1,299 billion ($57.99 million) from serving 22 million domestic passengers, compared to VND3,914 billion ($174.73 million) collected from only 9,6 million international flyers.

As for the airport security fees, the ACV also said the charge in Vietnam is much lower than many regional countries.

“The fees in Cambodia, Singapore and Myanmar are $3, $6 and $6.5 per passenger, respectively,” it elaborated.

According to the ACV, if the proposal is approved, carriers will only be expected to charge its passengers an extra VND5,188 ($0.22) per person, or 0.11 percent of the ticket price.

“This ratio is too small to be used as a cause to increase airfare,” a company representative was quoted by the Vietnam News Agency.

As for passengers, the extra fee is only VND40,000 ($1.79) per person if traveling through Category A airports, and half the amount if traveling through Category B airports, according to the ACV.

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