ACV abuses monopoly power, causes bad service quality at airports

February 20, 2017 | 15:48

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Airport Corporation of Vietnam, the sole airport company managing the 22 airports across the country, has recently been found committing several violations.

Violations everywhere

After eight months of inspection, on February 16, the inspectorate under the Ministry of Transport has released its findings on the quality of customer services at five airports, namely Noi Bai, Cam Ranh, Danang, Tan Son Nhat, and Con Dao, out of 22 airports in Vietnam.

This is the largest scale inspection of its kind. The result pointed out many shortcomings in all steps of operating the five airports.

First, the layout of the functional areas to provide services to travellers at the terminals does not match the contracts that ACV had signed with the companies renting the spaces. There are many rented spaces that are bigger in reality than in the contracts. For example, at Danang International Airport, the souvenir shop of Taseco (code DV46) is 20.57 square metres in area, while in the contract it is 14.52 square metres.

The same issue was found at Cam Ranh International Airport. Moreover, here ACV added more shops and restaurants in the post-security areas than allowed by the government, leaving little space for travellers to line up to wait for their flights.

At the point of inspection, most of the added areas at the five airports had not been approved by the Civil Aviation Authority of Vietnam. The space reserved for information desks was divided among companies to sell goods and services.

The bad management causes a loss of revenue to the state budget and decreases the quality of services.

No competitive bidding

The report pointed out that the inspected airports were not following the rules about competitive bidding for companies to sell goods and services inside. ACV does not have a uniform process to select service providers in its airports. Neither does it require airports to sign contracts when authorising certain taxi companies to provide services.

At the time of inspection, Noi Bai had not retrieved the area it had rented to NASCO, which has been abandoned by the company since 2015. Additionally. some money exchange booths at Cam Ranh airport do not follow the law.

Service providers at the five airports were found in violation of the following regulations: certification to ensure the quality and origin of products, regulations on labels, displaying the wrong exchange rate at money exchange booths, use of rented space, quality of services.

Despite its high profit, ACV has not invested in improving service quality. At Con Dao airport, there is only one security scanning machine for carryon luggage. If this machine is out of order, the airport will have to do the checking manually or use the machines for check-in baggage.

In 2016, ACV earned a revenue of VND14.5 trillion ($650 million), VND13.394 trillion ($600.6 million) of which was from sales of goods and services, up 25 per cent on-year. The company’s pre-tax profit was VND4.075 trillion ($182.7 million).

The Ministry of Transport requested ACV to cease all violations regarding the use of rented space. It also asked ACV to hold biddings to select service providers, including taxi at airports that were built using the state budget.

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