Vietnam Airfares to Rise - News on 24 November 2016


Tan Son Nhat Airport, airfares and air travel in general are all in the news at the moment.

First the fares; these are set to go up as the aviation administration wants to raise landing and take-off fees by 15%. And it seems likely that security and service fees for domestic passengers are likely to go up by 42%, which would mean an increase to VND100,000 for every passenger passing through the larger international airports of Cam Ranh, Can Tho, Cat Bi, Da Nang, Noi Bai, Tan Son Nhat and Vinh. Smaller airports in Central Vietnam, such as Buon Ma Thuot, Chu Lai, Dong Hoi, Lien Khuong, Phu Bai, Phu Cat, Pleiku and Tho Xuan, as well as Phu Quoc International Airport, would rise by 33%, or VND80,000 per person.

The director of the Civil Aviation Administration of Vietnam (CAAV), Lai Xuan Thanh, stated, “we think the recommendation [for the landing and take-off fee hike] is suitable because heated aviation growth has put a lot of pressure on infrastructure.” He added, “The fees are too low. They fail to account for how much the government has to subsidise the airports.” Landing and takeoff fees for domestic flights in the country currently range between VND1.35 million and VND3 million.

Photo by: Alec Wilson

Carriers are likely to swallow the rise in the short term, but it is surely just a matter of time before prices go up. The airlines will be demanding that the CAAV looks at the price hikes to calculate what impact this will have on passenger numbers. Whilst Vietnamese air travel is booming, more than 20,000 flights were delayed in the first six months of 2016. That’s almost 16% of the total number.

The growth in air travel in Vietnam is huge and nobody is expecting it to slow down anytime soon. Tan Son Nhat International Airport here in Saigon is stretched to bursting point. As plans are discussed to build a huge new international airport in the southern province of Dong Nai in 2019, talk is also happening regarding the future of the current one. A proposition was recently submitted to link the new metro system to the airport. At the same time, the government is looking at ways to expand Tan Son Nhat, already the largest airport in the country.

Tan Son Nhat is expected to double its capacity over the next decade. The local government is working with the ministries of transport, defence and natural resources to discuss the feasibility of scaling up the airport’s area by 21 hectares (52 acres) to the east. This would mean taking over land that is currently controlled by the defence ministry. This extra land would help the airport accommodate 50 million passengers a year by 2025.

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Tan Son Nhat accommodated more than 26.5 million passengers last year. This number is expected to increase to about 31 million in 2016, making the upgrade even more of a pressing issue. In addition to the rapid growth in passenger numbers, the airport has suffered badly from regular flooding this year.

What about current improvements at the busy Saigon airport? In October this year the airport opened the first phase of its expansion to the international terminal. There is now a 100 m2 sleeping room, housing 20 lounge chairs that are free to use, plus a 40 m2 play area. Additionally there are 10 small sleeping rooms with proper beds that are available to hire for around VND150,000. VND787 billion will be spent on the next phase which will extend the terminal to the west in 2017.

This recent expansion was funded by the Airports Corporation of Vietnam with additional commercial loans. It expects to lift the terminal’s annual capacity from 10 to 13 million passengers. When finished this new terminal will be 23% bigger. It will house 120 check-in counters, an increase of 50%. The number of boarding gates will raise from 12 to 19.

If the new airport link goes ahead and this expansion to the airport is successful, it begs the question as to why the city will need a new airport. The fact is, some people are already questioning whether the new airport will ever get built.

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