ACV abuses monopoly power, causes bad service quality at airports

After eight months of inspection, on February 16, the inspectorate under the Ministry of Transport has released the result of the inspection of the quality of service for customers at five airports namely Noi Bai, Cam Ranh, Danang, Tan Son Nhat and Con Dao, out of 21 airports throughout Vietnam. 

This is the inspection of the biggest scale in this aspect. The result pointed out many shortcomings in all steps of the process of operating the five airports.

First, the layout of the functional areas to provide services to travellers at the terminals is not correct according to the contracts that ACV had signed with the companies renting the space there. 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’s 14.52 square metres.

The same is repeated at Cam Ranh international airport. Moreover, at this airport, 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 flight.

At the point of inspection, most of the added area at five airports had not been approved by the Civil Aviation Authority of Vietnam. The space that should be information desks is divided for companies to sell goods and services. 

The bad management causes a loss of revenue to the state budget and decrease the quality of service.

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 for all the airports under its management to select service providers in airports. Neither did it require airports to sign contracts when authorising some taxi companies to provide services. 

At the time of inspection, Noi Bai had not retrieved the area that it had rented to NASCO that NASCO had not used since 2015. Some money exchange booths in Cam Ranh airport do not follow the law.

Service providers at the five airports violate the following regulations including certification to ensure quality of products and origin of products, regulations on labels, displaying the wrong exchange rate at money exchange booths, use of their rented space, quality of service.

Despite the high profit that it receives, ACV has not invested in making service quality better. At Con Dao airport, there is only one security scanning machine for carry-on. 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 revenue of VND14.5 trillion ($650 million), of the amount revenue from sales of goods and services was VND13.394 trillion ($600.6 million), up 25% on year, and before-tax profit was VND4.075 trillion ($182.7 million). 

The Ministry of Transport asked ACV to cease all the violations regarding the area of the rented space. It also asked ACV to hold the bidding to select providers of services including taxi at airports that were built using the state budget.