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Vietnam city proposes subsidizing airlines flying to local airport

Vietnam city proposes subsidizing airlines flying to local airport

Sunday, November 26, 2017, 21:32 GMT+7

The administration of a city in southern Vietnam has suggested using state money to provide subsidy to airlines opening new routes to its unmarketable airport.

The proposal has been submitted to the municipal People’s Council for review and approval.

According to the proposal, all airlines opening new routes to the Can Tho International Airport will be subsidized based on ticket price.

Specifically, passengers flying from the airport would enjoy an airfare of just 70 percent the normal cost, with the remaining 30 percent paid for by the city.

The subsidy is expected to encourage local and foreign airlines to open new routes to the airport, which is operating well below its design capacity of five million passengers a year.

Located in Can Tho’s Binh Thuy District, Can Tho International Airport was upgraded from the former Tra Noc Airport between 2006 and 2011 with a view to boosting the Mekong Delta’s economy as well as improving defense, security and international integration.

Can Tho is considered the economic hub of the delta.

However, airlines have been reluctant to operate flights to the airport due to low demand, as it sits only 180 kilometers away from the busy Tan Son Nhat International Airport in Ho Chi Minh City.

Airlines eligible for the planned subsidy must be committed to operating at least three flights weekly for domestic routes and at least two flights weekly for international routes.

All routes must be available for a period of at least three years.

According to the administration of Can Tho, the airport is expected to welcome over 612,000 passengers in 2017, which is only about 20 percent of its current maximum capacity.

Despite being an international airport, it currently serves predominantly domestic routes, including those to and from Hanoi, Phu Quoc, Con Island and Da Nang.

The only international route between Can Tho and Taipei is only available during the Lunar New Year travel season.

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