VietNamNet Bridge - Sun Group, FLC and IPP have poured money into aviation infrastructure, which was once thought to be beyond private investors’ capability.

IPP Group, the company of well-known businessman Johnathan Hanh Nguyen has sent a dispatch to Minister of Transport Nguyen Van The, asking for permission to join forces with the Airports Corporation of Vietnam (ACV) to develop the T3 Terminal at the Tan Son Nhat International Airport.

This is the second time within one year he has expressed his desire to do so.  

FLC Group owned by billionaire Trinh Van Quyet is also eager to invest in the aviation sector. Established as a real estate group, FLC has launched Bamboo Airways, and now plans to pour money into airports.

In April 2018, FLC sent a dispatch to the Ministry of Transport (MOT), Civil Aviation Authority of Vietnam (CAAV) and the Quang Binh provincial People’s Committee, showing its willingness to implement a project on upgrading Dong Hoi into an international airport under the BOT mode.

The enterprise wants to increase the airport capacity from 500,000 passengers to 10 million by 2020. The provincial authorities have agreed in principle to allow FLC to implement the project under the PPP mode.

The Van Don International Airport, capitalized at VND7.5 trillion, developed by Sun Group, is the first privately developed airport in Vietnam. 

Sungroup has the right to operate and exploit the airport, which is now the most modern in Vietnam. However, the service fees applied at Van Don are under the control of the State.

“We can see privatization in investment in aviation infrastructure,” the latest report of Vietcombank Securities (VCBS) says. VCBS said that this growing tendency helps ease the burden on the state, improves service quality, and brings benefits to passengers.

VCBS researchers pointed out that Vietnam’s aviation infrastructure conditions are poor.  The passenger transportation market is expected to grow 16 percent per annum until 2020 and by 8 percent per annum in 2020-2030, while the passenger transportation output is expected to reach 64 million and 131 million by 2020 and 2030, respectively.

Meanwhile, the five largest airports in Vietnam, namely Tan Son Nhat, Noi Bai, Da Nang, Cam Ranh and Phu Quoc, in 2018 have run beyond the designed capacity. Tan Son Nhat, for example, served 40.7 percent more passengers than its designed capacity.

With the application of modern technologies, airports still can satisfy the demand, but expansion and upgrading of airports is a must.

According to ACV, 15 key airports will be upgraded in 2018-2025, while the first phase of the Long Thanh International Airport and the terminals at Dien Bien, Na San and Lao Cai Airports will be built.

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