IATA urges Vietnam gov’t to support air cargo
The International Air Transport Association (IATA) called on the Vietnamese government to work with the air transport sector to strengthen the country’s economy through global air connectivity.
August 29, 2014
By Denice Cabel
The International Air Transport Association (IATA) 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.
“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,” said Tony Tyler, IATA’s director general and CEO in his keynote address at the Vietnam Aviation Day organised by IATA and Vietnam Airlines. Aviation contributes US$6 billion to Vietnam’s GDP and supports over 230,000 jobs.
Infrastructure is a critical component of the air transport sector which needs 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. The country is addressing these low rankings with significant investments. It has announced an aviation master plan to have 26 airports by 2020. Expansion programmes 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. Vietnam has indicated plans to open its airports to foreign investment and management, and to privatize the Airports Corporation of Vietnam. “While airport privatisation 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.