VietNamNet Bridge – The Ministry of Transport has sent a report to the Prime Minister proposing assistance policies for domestic airlines during the period in which they were affected by East Sea tensions.

The report detailed the damage that the airlines suffered recently, particularly the fall of Chinese tourists to Vietnam and vice versa, after China deployed its oil rig in Vietnam’s waters, and after riots that occurred in several provinces in Vietnam.

The aviation market suffered, with the most affected carrier being Vietnam Airlines. The airline canceled 13 air routes to 12 destinations in China from mid-May to the end of October. Currently, it maintains only routes to Beijing, Shanghai, and Guangzhou.

In total, 1,476 flights had been canceled between Vietnam and China, Hong Kong, Taiwan, Thailand from May through October, causing revenue loss of over VND2.88 trillion ($137 million) for the national carrier.

K6, the joint venture firm founded by Vietnam Airlines in Cambodia, was also affected. It had to shorten an aircraft lease contract and had to return an aircraft to Vietnam Airlines.

Jetstar Pacific also suffers losses after many flights between Vietnam and Macau were canceled in May and June.

In addition, the Airport Corporation and the Air Traffic Management Corporation lost fee revenue after many foreign airlines canceled flights to Vietnam. Specifically, China Southern Airlines, Spring Airlines, Hong Kong Airlines and Uni Air canceled more than 230 roundtrip flights to Vietnam by October 2014. The number of flights between Vietnam and China, Taiwan, and Hong Kong decreased 34 percent in the summer flight schedule.

To minimize the losses, air carriers had to find ways to cut internal costs and increase revenue.

To help Vietnam Airlines, the Ministry of Transport has allowed the airline to increase the maximum number of flights within one hour from 30 to 32 and adjust the flight schedule for many routes from Hanoi and Ho Chi Minh City.

To reduce dependence on the Chinese market, the Ministry of Transport told Vietnam Airlines to develop inter-continental air routes, including direct flights to India beginning in summer next year.

The other domestic carriers - Vietjet Air and Jetstar Pacific – will enjoy a 25% discount on air traffic management fees, landing and take-off rates at airports and security screening charges from May 1 until December 2014.

In addition to the preferential policies, the Ministry has proposed to the Prime Minister to consider slashing taxes on fuel imports from 7% to 3% and loosening entry visa policies for a number of important markets such as the UK, France, Germany, Australia and India.

Na Son