Vietnam may raise airport service fees to fund $1.1 billion upgrade plan: report

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A file photo of passengers leaving an airplane at Tan Son Nhat International Airport, Ho Chi Minh City. Photo: Diep Duc Minh A file photo of passengers leaving an airplane at Tan Son Nhat International Airport, Ho Chi Minh City. Photo: Diep Duc Minh

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Vietnam will need more than VND26.2 trillion (US$1.16 billion) to upgrade its airports over the next two years and service fees may be increased to provide funding for the project, according to local media.
Nearly 30 percent of the estimated cost will be funded by the state to make sure local airports are capable of meeting future passenger growth, news website Thoi Bao Tai Chinh Vietnam reported, citing Dao Viet Dung, deputy general director of state-controlled Airports Corporation of Vietnam.
The company, which manages 22 airports around the country, will cover the rest, he said.
In order to fund the upgrades, the company will seek the transport ministry's permission to increase service fees for domestic flights, such as runway and passenger surcharges, Dung said.
At the moment, such fees for international flights are around 2.5-8 times higher than those for domestic flights, he said. Details about the possible fee hikes have not been disclosed. 
The Airports Corporation, which saw a 2.37 percent revenue increase to over VND11.87 trillion last year, earlier reported that with the exception of Tan Son Nhat and Noi Bai, the other 20 airports have been making losses or have barely broken even.
With 13 subsidiaries, mostly operating in ground services, the company raised $51.6 million from selling a 3.47 percent stake in an initial public offering at the end of last year.
It is expected to earn at least another VND2.2 trillion ($98.1 million) from the upcoming sale of a 7.4 percent stake to France's Aeroport de Paris. Under the government's plan, ACV will have to sell more shares to private investors until the state ownership falls to around 75 percent.
Vietnam's air market is forecast to see a rise of 19 percent to 45 million passengers this year.

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