VietNamNet Bridge – After reporting a profit of VND82.3 billion in the first half of 2014, the national flag air carrier Vietnam Airlines has continued to ask the government to give preferences to offset a loss of revenue it had incurred due to escalating tension in the East Sea.

Vietnam Airlines has asked for the government’s nod on the 25 percent airport fee reduction and a 4 percent cut (from 7 percent to 3 percent) on the import tariff on air petrol.

The air carrier estimates that if the tariff cut proposal is approved, it will be able to cut VND118 billion in expenses.

It has also asked to delay a plan on increasing premises’ rents and other airport services and loosen visa granting policies applied in important markets such as the UK, France, Germany, Australia and India.

According to the Ministry of Transport, Vietnam Airlines asked for the preferences after it lost VND2.88 trillion worth of revenue due to the tension in the East Sea.

The sharp decrease in the number of Chinese and Vietnamese travelers between the two countries after the Chinese illegal deployment of an oil rig in the East Sea forced Vietnam Airlines to cancel 13 air routes from Vietnam to 12 destination points in China between May and October.

It was estimated that 42,000 tickets were canceled for 170 flights scheduled from May to mid-June. As for the other air routes to China, the seat occupancy rate reportedly decreased by 50 percent.

The political uncertainties in Thailand and Ukraine also badly affected Vietnam Airlines’ business performance with the number of passengers on the air routes to Thailand, Japan and Russian dropping sharply.

Economists have commented that the claims are “unreasonable”, while describing Vietnam Airlines as “the rich that beg for a living”.

Dr. Tran Dinh Ba from the Vietnam Economics Science Association pointed out that Vietnam Airlines, which predicted sharp reduction in profits due to problems with the air routes to China, made a profit of VND82.3 billion in the first half of the year.

Ba said that Vietnam Airlines, as the state-owned flag air carrier, has been enjoying many preferences. “How will it explain to the other airlines if it keeps asking for more preferences?” he asked.

“In a market economy, you can pocket big money if you make profits and you have to sustain losses if the business performance is not good, instead of begging for the government’s support,” he said.

Dr. Cao Sy Kiem, former governor of the State Bank of Vietnam, also said the air carrier’s proposal must not be accepted, because giving preferences to certain enterprises means being contrary to the market economy’s rules.

“If the proposals are accepted, the management agencies would help Vietnam Airlines damage the Vietnamese aviation market,” he said in Dai Doan Ket.

Bui Kien Thanh, an economist, also commented that in a market economy, all enterprises must be treated equally, and that it would be unfair to continue offering incentives to an enterprise which has been enjoying too many preferences already.