ACV hellbents on increasing service charges

Airports Corporation of Vietnam (ACV) has requested the Ministry of Transport (MoT)’s approval to increase the price of aviation services in 2017, according to newswire Cafe.

It is the second time that ACV have submitted the proposal.

The reason of the proposal is that there is little difference in the construction cost of international and domestic terminals. However, the service charges at domestic terminals are one fifth of those at international terminals, forcing ACV to use its profit from international flights to counterbalance the losses from domestic journeys. 

Currently, the Ministry of Finance allows an airport fee of VND40,000-70,000 ($1.77-3.09) per passenger for domestic flights. However, almost all airports apply the highest permissible charge of VND70,000 ($3.09) per passenger and a few airports, such as Phu Cat and Tho Xuan in the central region, collect VND60,000 ($2.65) per passenger.

According to ACV’s proposal, passengers of domestic flights will pay an extra 43 per cent, equalling VND30,000 ($1.32), for airfares and 7 per cent for departure and landing costs.

The extra charges will be applied at domestic terminals in seven airports, including Tan Son Nhat, Noi Bai, Da Nang, Cam Ranh, Phu Quoc, Vinh, and Phu Bai from January 1, 2017.

According to ACV’s report, the service charges from these domestic terminals made up 21 per cent of the corporation’s total service charges in 2015. 

ACV is the only state-run business managing and running 22 international and domestic terminals in the country, with 65 per cent of its revenue coming from the sales of duty-free goods in airports.

It also works on 19 investment projects, with the total investment capital of VND5.8 trillion ($261.5 million). Some of its large projects include the expansion of Tan Son Nhat International Airport (VND1.06 trillion ($47.8 million)) and Phu Quoc Airport (VND696 billion ($31.4 million)), and the construction of Cat Bi International Airport’s parking lot costing VND1.5 trillion ($67.6 million).

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By Ha Vy