Airports Corporation of Vietnam aims for 9 percent expansion

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Illustrative photo. (Source: nld.com.vn)

ACV holds a positive view of the growth trajectory of the Vietnamese air transport market thanks to the participation of new domestic airlines and the addition of international flights to Phu Quoc, Phu Yen and Phu Cat, said ACV General Director Vu The Phiet at the company’s 2019 Annual General Meeting of Shareholders in HCM City on June 22.

However, the company is expected to encounter some difficulties related to competition from the private sector, policies on flight zones, investment rights and delayed land procedures, along with increasing electricity and fuel costs and the unstable global political situation.

Therefore, AVC expects revenue growth for both aviation and non-aviation services to be lower than last year, Phiet said. Aviation service revenue will continue to rise but the increase will be lower than in 2018 due to lower international revenues from Cam Ranh Airport.

Non-aviation revenue is also expected to report lower growth than last year. In 2018, many new facilities were completed and put into operation, but this year, most new projects are still preparing for investment. The company aims to raise non-aviation service revenue to 40 percent of its total revenue in the next few years, Phiet said.

In 2018, profit increased sharply thanks to the policy of increasing service prices under Decision 2345 of the Ministry of Transport. The company recorded total revenue and post-tax profit of 17.8 trillion VND and 6 trillion VND, up 19 percent and 44 percent respectively against 2017.

Phiet said the company has submitted a feasibility study for the first phase of construction for Long Thanh International Airport. It is awaiting review before sending the study to the National Assembly for approval in October, 2019.

Lai Xuan Thanh, Chairman of ACV, said that the plan to list on the HCM Stock Exchange depended on the company’s equitisation process. ACV needs to assess the value of its assets and State assets before it can move forward with equitisation.

In 2019, ACV will continue to invest in infrastructure to meet the needs of airlines with investment capital of more than 7.3 trillion VND, including to fund the construction of terminal T3 at Tan Son Nhat Airport in HCM City, the project to expand terminal T2 at Noi Bai Airport and the terminal T2 project at Cat Bi Airport in Hai Phong city.

Phiet said the feasibility study for the new terminal was nearly finished. The terminal is expected to have an annual capacity of 20 million passengers, one station and one high rise garage. It is expected to cost 11.5 trillion VND in total. 

Phiet said the company is still struggling to secure enough funding to complete the project. It has asked to Government to allow it to construct the terminal and serve as its investor.