According to economic expert Bui Trinh, the proposal to draw national budget to compensate new air routes' losses is untenable.
The People's Committee of Can Tho City has submitted a proposal to the City People's Council called "Policy on supporting airlines to open new routes to and from Can Tho International Airport". But according to economic expert Bui Trinh, the proposal to draw national budget to compensate new air routes' losses is untenable.
Can Tho International Airport was opened on Jan 1, 2011, it will serve from 3 to 5 million passengers and about 5,000 tons of cargo per year, according to government plans. Currently, the port operates domestic flights to Hanoi, Phu Quoc, Con Dao, Da Nang.
In 2016, passenger traffic through the port stood at 550,090, while the volume of cargo was 3,420 tons. In 2017, the figures are expected to reach 612,512 and 3,749 respectively, reaching around 20 per cent of designed capacity.
However, the airport only operates a few seasonal international routes, including ones to Taipei during Lunar New Year, and to Bangkok in the summer .
According to the People's Committee, the promotion of opening new routes to Can Tho International Airport has been regularly organized by the Ministry of Transport and the local authorities.
Yet, other airlines such as Vietnam Airlines, VietJet, Jetstar Pacific have not been able to open new routes to Can Tho International Airport due to financial risks in the first year of investment.
The City People's Committee, therefore, proposed policies to encourage and support airlines in the first year to open new routes and maintain stable and long-haul routes.
Economist Bui Trinh said that airlines are independent businesses, while the budget belongs to the people. One cannot withdraw the money of the people to offset losses for businesses. He reasoned that subsidies of this kind only benefit businesses, not customers.
Sharing same perspective, Dr. Le Dang Doanh, former director of the Central Institute for Economic Management (CIEM), said that the proposal is interfering too deeply into the price market and not in line with the market forces.
"Can Tho should study the case thoroughly and transparently to attract customers by means of market mechanisms", he said.
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