IATA identifies strategic opportunities for aviation in Vietnam

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By TESTCustomwebLP TESTCustomwebLP August 27, 2014 20:31

IATA identifies strategic opportunities for aviation in Vietnam

IATA has called on the Vietnamese government to work with the air transport sector to strengthen the country’s economy through global air connectivity. IATA identified three broad strategic areas to focus on:  infrastructure, passenger experience and cargo.

At IATA’s recent Vietnam Aviation Day co-organized by Vietnam Airlines, IATA DG and CEO Tony Tyler said: “Vietnam is a dynamic and rapidly growing aviation market. The successful development of aviation will pay big dividends to the Vietnamese economy. It must be treated as a strategic asset and handled correctly.”

Aviation contributes $6 billion to Vietnam’s GDP and supports over 230,000 jobs. Between 2008 and 2013, Vietnam’s passenger traffic grew by 96%.

Vietnam’s aviation infrastructure is a key area that IATA identified as requiring improvement. Vietnam ranks 82nd in the Infrastructure Index of the World Economic Forum’s Global Competitiveness Report. Among the ten ASEAN states, Vietnam is ranked sixth. It has announced an aviation master plan to have 26 airports by 2020. Expansion programs are underway at Hanoi and Ho Chi Minh airports, with the new Long Thanh International Airport to be ready by 2020.

While encouraged by the positive steps taken to improve Vietnam’s infrastructure, IATA urged careful planning and industry consultation leading to a well-thought-out regulatory structure in advance of any change to the current structure and ownership of Vietnam’s airports.

“While airport privatization can provide access to the capital needed for infrastructure programs, we have seen enough spectacular examples of unintended negative consequences to urge caution. The most common being unjustified increases in charges or under-investment in the CAPEX plan as the private operator tries to squeeze out profit,” said Tyler.

“To balance the market power of privatized airports, Vietnam needs to establish an effective independent economic regulator that is in line with well-established international norms. That should bring about fair charging schemes aligned with ICAO policies. Lower charges will also improve the viability of routes and allow Vietnam to reap the benefits from enhanced connectivity and increased traffic,” Tyler added.

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By TESTCustomwebLP TESTCustomwebLP August 27, 2014 20:31