Gov’t to give support to relieve losses incurred during East Sea incident with China

Gov’t to give support to relieve losses incurred during East Sea incident with China

VietNamNet Bridge – Air carriers are looking forward to receiving several preferences to be given by the government as support to help them relieve losses caused by the tensions in the East Sea.

The Ministry of Transport has submitted a report to the Prime Minister about the losses Vietnamese air carriers have incurred since the day China deployed an oil rig in the East Sea, triggering the tension escalation in the region.

After riots incited by extremists in May, Chinese, Taiwanese and Hong Kong governments recommended that their people not travel to Vietnam.

Chinese and Vietnamese have canceled tours to Vietnam and China they had booked before.

This has had a major negative impact on Vietnamese airlines’ operations. The national flag air carrier Vietnam Airlines suffered the most. It had to cancel flights on 13 air routes to 12 destinations in China from May to October. It now only maintains air routes to Beijing, Shanghai and Guangzhou.

A report of Vietnam Airlines showed that by October, 1,476 two-way flights will have been canceled, causing the loss of VND2.88 trillion in revenue.

In order to help Vietnam Airlines overcome current difficulties, the Ministry of Transport has allowed the air carrier to promote the flights with the departure point in HCM City.

The ministry has decided to increase the number of flights the carrier can provide within one hour from 30 to 32.

Following the ministry’s instruction, the Civil Aviation Authority of Vietnam (CAAV) has released a decision allowing Vietnam Airlines to provide more flights and adjust the flying time for flights from Hanoi and HCM City.

In order to ease reliance on the Chinese market, Vietnam Airlines has been told to create a plan to open a direct air route to India and put into operation beginning in the summer of 2015. It would be allowed to apply service fee reductions on the air route for three years.

The other two air carriers, Vietjet Air and Jetstar Pacific, will enjoy a 25 percent fee reduction in operating services and some other services from May 1 to the end of 2014.

A question has been raised about where enterprises in other industries would be able to enjoy preferences (like Vietnam Airlines) if they also incur huge losses due to tensions in the East Sea.

The Ministry of Culture, Sports and Tourism, at a press conference held on May 19, reported that the number of travelers from Chinese-speaking markets to Vietnam has dropped sharply.

Regarding losses to the tourism industry, General Director of the Tourism General Department Nguyen Van Tuan then said that with the Chinese average spending of $500 per traveler, the loss of revenue would reach $500 million.

The General Department of Customs’ report pointed out that the tensions in the East Sea led to a sharp fall of VND860 billion in import-export turnover with China in June in comparison with May.

Dat Viet

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