Can Tho proposes using budget for loss-making flight routes

Friday, Dec 01, 2017 15:30

Can Tho International Airport is designed to receive 3-5 million passengers per year. — Photo

Can Tho People’s Committee has proposed to use the municipal budget to support carriers launching new flight routes to/from the city’s airport but incurring losses from these routes.

The proposal will be up for comment at the December meeting of the People’s Council.

Seven years since Can Tho International Airport was opened in 2011, the airport currently serves only domestic flight routes connecting the Mekong Delta city with Ha Noi, Phu Quoc, Con Dao and Da Nang.

The airport receives international flights from Taiwan and South Korea only during months approaching the Tet (Lunar New Year) holiday when there was an increase in travelling demand.

The airport is designed to receive 3-5 million passenger arrivals and departures per year. However, in 2016, the number of passengers using the airport was only 550,000, and is estimated at 610,000 this year.

The volume of cargo transported through the airport was equivalent to just 20 per cent of its designed capacity.

The municipal People’s Committee said opening new flight routes would help attract more investors, especially foreign ones, to Can Tho, adding that support policies should be raised to encourage carriers to open new flight routes.

According to Dang Thi Anh Dao, head of Economy and Budget Board of the People’s Committee, by launching new flight routes, the city expects to attract more investments and promote tourism, which would stimulate economic growth and improve budget revenue.

Thus, the proposal was not targeted at using the budget to make up for the losses from flight routes to Can Tho, but instead was aimed at promoting social-economic development.

Under the proposal, Can Tho would use its budget to support carriers to lower fares equivalent to 30 per cent of the fare prices of flights to/from Can Tho International Airport. Only carriers that had opened new flight routes and conducted flights following commitments but incurred losses from these new routes would receive support.

According to Nguyen Thien Tong, a professor in aviation technology, it was necessary to study the market demand carefully before opening new flight routes.

Pham Trung Luong, former deputy director of the Institute for Tourism Development Research, said southern Can Tho Province should diversify their tourism products to attract tourists. Ticket fares weren’t the only solution, Luong said.

He said that earning profits or incurring losses was the firms’ matter, adding that the budget should not be used in making up for the losses of businesses.

The province should instead focus on improving business climate and promoting tourism, he noted. — VNS

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