New airlines may put pressure on Vietnam's airport infrastructure

The local aviation market is booming as several new airlines have entered the market, provoking concern over how major airports in the country can handle sudden rises in passengers and aircraft movements.

New airlines may put pressure on Vietnam's airport infrastructure
Passengers stand in line for check-in procedures at Tan Son Nhat International Airport - PHOTO: LE ANH

Over the past five years, some major airports such as Tan Son Nhat, Noi Bai and Danang have received funding for repairs and upgrades to meet the rising air travel demand. However, the investment has been trivial given the rapid rise of air passengers.

Statistics from the Civil Aviation Authority of Vietnam (CAAV) show that Vietnam is operating 22 airports with a combined capacity of 90.4 million passengers per year, but last year, some 103 million passengers went through those airports.

Tan Son Nhat International Airport currently has two passenger terminals with a combined designed capacity of some 28 million people per year. The airport, however, served 38.3 million passengers in 2018, whereas Danang International Airport, whose designed capacity is 10 million passengers per year, faced the same fate, receiving 13.2 million passengers last year.

Due to the worsening airport overload, the Ministry of Transport is planning to invest in several airports such as Long Thanh; fund passenger terminal T3at Tan Son Nhat International Airport; and expand Vinh, Phu Bai and Cat Bi airports.

The ministry had earlier proposed the prime minister assign the Airports Corporation of Vietnam (ACV) to act as the investor for terminal T3 at Tan Son Nhat, which is facing a severe overload. However, the Government has yet to decide on the proposal, so the project has stalled.

Some economic experts told the Saigon Times that airport infrastructure should have been developed prior to the entry of new airlines, which will drive up local carrier numbers. However, at some major airports in Vietnam, the opposite took place.

Dr. Nguyen Thien Tong at HCMC Polytechnic University said that the country has 22 airports, but some are facing an overload in terms of infrastructure, while the rest are operating far below capacity, which is wasteful.

New airlines tend to open air routes linked with large airports that welcome large numbers of passengers, so the overloaded airports such as Tan Son Nhat and Noi Bai will get even more overwhelmed.

“Temporarily, the Ministry of Transport should not grant business licenses to new carriers due to the limited airport infrastructure,” he told the paper, adding that the new airlines should be encouraged to operatein potential airports or those operating below capacity, such as Can Tho, Lien Khuong, Phu Bai, Phu Cat, Vinh, Tho Xuan and Dong Hoi.

 

CAAV deputy head Vo Huy Cuong pointed out that to meet the demand for the growth of the local aviation market, the authorities should boost investments in airport infrastructure, such as parking slots, runways and taxiways.

Cuong proposed that airlines should consider cutting domestic short-haul flights as the country currently has expressways and railways and should switch to operating international air routes.

To foster the aviation market, the Ministry of Transport approved a plan to invest in some airports in Vietnam until 2025. During the process of granting business licenses to fresh airlines, the ministry will consider the capacity of airports and safety issues.

Aviation infrastructure is receiving significant interest from private firms that wish to build airports and terminals, but regulatory obstacles are deterring investors.

Speaking at a seminar on aviation infrastructure development in May, Vu Pham Nguyen Tung, project development director at Vietjet Air, said that the carrier wanted to invest in Dien Bien Airport but had faced obstacles over the use of capital and other requirements. As regulated, the funding for the planning of airports must come from the Government, Tung explained.

Vu Tien Loc, chairman of the Vietnam Chamber of Commerce and Industry (VCCI), told the paper that the major bottleneck in airport investment lies in regulations. He stated that to address the bottleneck, it is necessary to relax regulations on traffic infrastructure investment.

Apart from regulations, administrative procedures also prevented airport investment projects from being executed, he said.

Le Anh

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