A VietJet Air flight lands at Da Lat's Lien Khuong Airport. The Civil Aviation Administration of Viet Nam (CAAV) has called on the Transport Ministry to allow foreign investors to participate in managing and operating the terminals. — VNA/VNS Photo

HA NOI (VNS)— The Civil Aviation Administration of Viet Nam (CAAV) has called on the Ministry of Transport to allow foreign investors to participate in managing and operating terminals.

The proposal, if approved, will create a stimulus for the local aviation market as it will pave the way for highly capable international investors to enter Viet Nam, CAAV head Lai Xuan Thanh told Tuoi Tre (Youth) newspaper.

Under the approved master plan on aviation development between 2012 and 2020, Viet Nam will need VND221 trillion (US$10.57 billion) to repair and upgrade 26 terminals nationwide.

However, it will be a burden if it only relies on State capital for infrastructure rebuilding, Thanh said.

"It's necessary for assistance from international investors with modern technology, experienced administrative management, and strong financial resources," he added.

One of the most particular features of the airports in Viet Nam is that they are mutually used for both military and civil purposes.

Moreover, it is currently stipulated that the terminals must be operated by the State, which has hindered the mobilisation of international investment to establish and operate the terminals, Thanh said.

Therefore, he suggested categorising the airports into two classes.

The first class would include terminals that are significant for both international traffic and national security. such as Noi Bai, Da Nang, Tan Son Nhat, Long Thanh, Cam Ranh, and Na San. The remainder would form a second class.

Thanh said the Government would maintain its key role in terms of capital and management at first-class terminals, but still leave space for international investors to join.

These terminals had high potential for commercial development, thus were attractive to investors, Thanh said.

"As for those in the second class, we suggest privatisation or allowing investors to invest in and operate," he added.

The CAAV also asked the transport ministry to release regulations related to conditions for international investors to take part in the local aviation market before officially proposing the plan to the Government.

While awaiting a more open Government policy, several foreign investors have visited Viet Nam for market research, Thanh said.

The investor of Singapore's Changi terminal has studied Hue airport, and a group of US investors also visited the terminal recently, he said.

But Thanh admitted there had been no wave of investors coming and said he hoped that more would come once the proposal is approved.

Many other airports such as Can Tho, Da Lat and Nha Trang are also very potential and attractive to investors, he added.

The CAAV head also revealed that, compared to neighboring countries like Malaysia and Thailand, Viet Nam now only had an average density of airports.

However, many investors thought that many Vietnamese terminals were incapable of generating profits and that only a few could make modest profits, Thanh said. — VNS