VietNamNet Bridge – Local aviation companies are expected to save a total of US$60 million on aircraft purchases from now to 2015 given participation in the Cape Town Convention and the Aircraft Protocol, said Lai Xuan Thanh, head of the Civil Aviation Authority of Vietnam under the Ministry of Transport.

Thanh, at a conference introducing the Cape Town Convention and the Aircraft Protocol in HCMC on Tuesday, told the Daily that the convention was established in 2006 and has lured the participation of 58 countries so far.

Based on signed contracts and aircraft purchase plans, local firms are expected to save US$60 million because the credit guarantee fee will be cut to 2% compared to the current level of 3%. The nation at present has to mobilize from many sources for aircraft purchase, of which loans make up 90%, Thanh said.

In recent years, the best loans for aircraft purchase have been made from export credits guaranteed by Export-Import Bank of the U.S. (Ex-Im Bank) and European Export Credit Agencies (European ECAs).

Therefore, if Vietnam joins the convention given export credit policies of Ex-Im Bank and European ECAs, local enterprises will save around US$60 million thanks to the preferential fee rate for members of the convention.

Thanh said Vietnam Airlines has plans to buy 10 A321 aircraft by 2014. If the country joins the Cape Town Convention and the Aircraft Protocol, Vietnam Airlines will be able to save around US$6.1 million from discounts of producers.

Besides, the national flag carrier could save US$26 million on the purchase of eight Boeing 787-9 Dreamliner planes thanks to guarantee fee discount from Ex-Im Bank and European ECAs.

The National Assembly Foreign Affairs Committee and the Ministry of Transport are fielding suggestions from related agencies to seek approval for Vietnam to join the convention.

The Vietnam Airlines fleet totals 91 aircraft, with around 40 of them owned by the airline. Thanh said the carrier is looking to expand the fleet to 150 with an ownership ratio of 50% by 2020 to reduce transport charges and raise competitiveness.

Trinh Ngoc Thanh, deputy general director of Vietnam Airlines, said that Vietnam has faced challenges in mobilizing capital to buy aircraft in recent times.

The airline plans to spend around US$2.4 billion buying or hiring around 20 aircraft from now to 2018. Of this, it will buy eight planes.

If Vietnam is a member of the Cape Town Convention and the Aircraft Protocol, the Ex-Im Bank could charge 2% credit guarantee fee, instead of the current 3%, Thanh added.

Source: SGT