In early June, Bamboo Airways officially opened the first direct flight route Hanoi - Ca Mau. Similar to the previous direct flight route Hanoi - Con Dao, passengers will not have to spend time transferring from Hanoi to Ho Chi Minh City and then taking a connecting flight or taking a train or bus to Con Dao or Ca Mau. Although there are only 3 flights/week due to low demand, the distance in space and time are both shortened, creating long-term boosts for tourism and socio-economic development of localities.
Van Don Airport is the first privately invested "BOT airport" in Vietnam.
PPP investment bottleneck
However, the biggest weakness is that Ca Mau airport is currently small in scale, limiting its use with large aircraft. During the meeting between the Ministry of Transport and the People's Committee of Ca Mau province last weekend, Vice Chairman of the People's Committee Lam Van Bi also requested the Ministry of Transport to propose to the Prime Minister for approval and implementation of investment to renovate and upgrade Ca Mau airport to meet 4C standards.
In case the Vietnam Airports Corporation (ACV) does not have an investment plan to upgrade, it is recommended that the Ministry of Transport agree with the State Capital Management Committee to report to the Prime Minister to agree on the policy of handing over Ca Mau Airport to the province for management and calling for investment to upgrade in the direction of socialization. However, as National Assembly delegate Nguyen Duy Thanh (Ca Mau delegation) said, if following the current proposed socialization policy mechanism, "Ca Mau airport is easily abandoned, because ACV is no longer responsible for expansion and upgrading. Even if ACV is responsible for investing in Ca Mau airport, it will have to wait many more years. As for new investors, they are not yet attractive, so it is very difficult to invest".
In fact, socializing airport investment is not easy. Talking to Thanh Nien, Mr. Pham Ngoc Sau, former Director of Van Don International Airport (Quang Ninh) and currently promoting the development of aviation infrastructure projects for SOVICO Group, said that many airports such as Bien Hoa (Dong Nai), Phan Thiet (Binh Thuan), Vinh (Nghe An), Thanh Son (Ninh Thuan) are in dire need of upgrading and expansion. Otherwise, it will be difficult to increase the exploitation capacity, while the land fund and potential are still very large, causing a waste of resources.
According to Mr. Sau, for completely new airports like Van Don, investing in the form of BOT is simpler. However, for existing dual-use airports or those under the management of ACV, the way to cooperate with new investors is not simple. "The Ministry of Transport has a project to attract social investment in airports with many quite open mechanisms. However, with the characteristics of many dual-use airports that are jointly exploited by the military and civil sectors, the military side is not allowed to upgrade. Meanwhile, according to ICAO civil aviation standards, they must meet the standards to be able to operate commercial aircraft. In other words, the mechanism is open but the regulations must be clearer and have additional adjustments," said Mr. Sau.
Lack of MAJOR INTERNATIONAL gateway airport
Vietnam currently has 22 airports, while Thailand has 38, Malaysia has 66 (including 38 commercial airports), and the Philippines has 70 airports. In terms of transit passenger volume (2019 data before the Covid-19 pandemic), Thailand leads with 91.3 million passengers, Malaysia with 76.3 million...
With the orientation of developing Suvarnabhumi Airport into a Southeast Asian aviation hub, Thailand has planned a long-term 4-phase planning for this airport, with the goal of increasing capacity to 90 million passengers/year by 2025 and 105 million passengers by 2030. Before the Covid-19 pandemic, this was considered one of the largest international airports in the region, serving 115 airlines with nearly 65 million international passengers.
Despite having one of the fastest aviation growth rates in the region, Vietnam's airport network is still very limited, especially lacking regional-scale airports and far from becoming a hub for the region and the world. One of the two largest airports in Vietnam , Noi Bai, although exceeding its design capacity, only reached 29 million passengers in 2019. Tan Son Nhat, which has the highest capacity in the country, only reached 40.6 million passengers.
Both Tan Son Nhat and Noi Bai have plans to expand their capacity to 50 million passengers per year by 2030, but expansion at the two largest international airports in the country has been sluggish for many years. According to the national airport planning recently approved by the Government, the vision for 2050 is to form two regional-level international transit hubs in Hanoi and Ho Chi Minh City.
A former airline executive once expressed that if Vietnam did not have large international gateway airports, its competitiveness would be very limited. In reality, very few international airlines fly across the continent to Noi Bai and Tan Son Nhat, instead they fly to regional gateway airports such as Bangkok (Thailand) or Singapore. Instead of becoming a hub - a major transit connection point in the region, Noi Bai and Tan Son Nhat have become "bus stops" - stops to collect passengers to Singapore.
Absence of dedicated airports
In the approved planning, the Government oriented to ensure the needs of socio-economic development, localities proactively planned the location of specialized airports in the provincial planning after the Ministry of National Defense approved the location and the locality took the lead in mobilizing resources for implementation. At the same time, research and exploit dual-use at some military airports according to the specialized model. Currently, the whole country has only one project, Ho Tram airport (Loc An, Ba Ria-Vung Tau) approved by the Ministry of National Defense as a specialized airport.
The exploitation of specialized airports is suitable for the development of investment and tourism in remote areas or localities not included in the civil aviation planning. However, the "fever" of airport investment has caused many localities to compete to apply for investment in commercial airports and airports, while forgetting specialized airports.
Sharing this view, Mr. Pham Ngoc Sau stated that to develop aviation, there must be transit hubs, with local airports acting as spokes (satellite airports). According to the flight network project, Vietnam will have two main hubs: Hanoi and Ho Chi Minh City. "With the remaining airports, it is best for ACV to "release" them for private investors to participate. Small local airports are mostly unprofitable, but the goal is not only for profit but will change the face of the locality and create a very good ecosystem for the socio-economic development of the locality," Mr. Sau emphasized.
This expert believes that when exploiting an airport, it is necessary to synchronously synthesize aviation and non-aviation services, from counter services, shops to external services... Previously in Vietnam , even ACV exploited non-aviation services ineffectively, the revenue ratio from ACV's non-aviation services only reached 21%, while a similar company in Korea reached 60%. In other words, there is still a lot of room to increase surplus value from non-aviation services if we know how to exploit them effectively.
"Korea's aviation development thinking is not only aimed at aviation but also at non-aviation services, creating "airport cities" that create great economic value. Airport city is not only a commercial area but also a hotel, medical examination area, golf course and entertainment area right next to the airport, when people come there they can rest, have fun and entertain like a tourist destination before flying, providing all services for passengers in need. Vietnam currently does not have any similar model, even Long Thanh is just a future orientation", Mr. Sau cited.
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