VietNamNet Bridge – No matter how tight the control the state would keep over airports, the development of civil airports will always a lucrative business field.
Natural monopoly brings money
IPP, a branded-goods distributor, last week added itself into the list of the candidates racing for the concession to exploit Phu Quoc Airport. Prior to that, TT Group also applied for the right to operate the airport in the south.
IPP is also one of the candidates competing for the right to develop T1 Terminal of the Noi Bai International Airport. The other two candidates are Vietjet Air and Vietnam Airlines.
Developing airports is really a profitable business field in the eyes of large investors.
Local newspapers some days ago reported that Rang Dong Group got a license to build and operate Phan Thiet Airport in Binh Thuan province, while Sun Group obtain a license to build Van Don Airport in Quang Ninh province.
Both airports would be built and developed under the BOT mode (build, operation, transfer). This means that after the investors finish the construction, they will have the right to develop the airports for a definite time before transferring to the state.
It is a surprise to many people that private investors are so interested in airport development, which they don’t have much interest in.
“It is more profitable to invest in airports than in airlines,” said Luong Hoai Nam, CEO of Hai Au, a private airline.
Nam is an experienced airline manager. In the past, he worked for Vietnam Airlines, the national flag air carrier, and CEO of Jetstar Pacific, a budget airline now put under the Vietnam Airlines’ control.
According to Nam, the attractiveness lies in the natural monopoly that enterprises can enjoy if they have the right to operate the airports.
In fact, natural monopoly exists in all airports all over the world. Any air carrier who provides flights to Hanoi will have to land in the Noi Bai Airport. Meanwhile, though passengers fly with different air carriers, and they all have to use the services provided by Noi Bai.
“Monopoly is the most attractive thing to investors,” Nam said.
Lai Xuan Thanh, head of the Civil Aviation Authority of Vietnam (CAAV), while affirming that the watchdog agency will take necessary measures to ensure a competitive market, admitted that the natural monopoly cannot be eliminated.
Therefore, Thanh said, the state will have to lay down reasonable policies to restrict investors’ monopoly abuse of the nation’s, air carriers’ and passengers’ benefits.
The Ministry of Transport, for example, has recently instructed service providers to lower the food services at the Noi Bai Airport to ensure reasonable service fees for passengers.
NCDT