Vietnam bets on new airports to boost tourism and supply chains

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Around the world, travellers check in at airport kiosks, drop off their bags and get through boarding gates, all without the help of staff, said Do Dieu Huyen. Why is this self-service routine not in Vietnam?

Huyen is helping to change that as an operation specialist at the state-owned Airports Corporation of Vietnam. Technological facelifts are just one part of the national plan to construct or upgrade airports across the country. The strategy: if we build, tourists will come and so will trade.

A master plan signed in June calls for 30 airports by 2030, up from 23 now. Even as this flies in the face of carbon reduction pledges, supporters of the plan say expansion must keep pace with the rising middle class and manufacturing sector.

“It’s a big benefit to the Vietnamese economy, also contributing to the supply chain and export infrastructure,” Huyen told Nikkei Asia.

Few would prefer the status quo. At the biggest airport, Tan Son Nhat in Ho Chi Minh City, passengers are bussed to aeroplanes more often than not due to a lack of gates. Tourists spend hours at security and passport control even when leaving the country.

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These are the strains of a facility operating far beyond capacity. Prime Minister Pham Minh Chinh said the inefficiencies were holding back the economy, with the city next year likely to see double the 25mn flyers its airport was designed to handle, news outlet VnExpress reported in September.

Flight delays cost fuel and time, while also holding up freight, which will require more capacity as logistics demand takes off. By 2030 Vietnam’s air cargo is expected to reach 270 per cent of the current volume, the US International Trade Administration said.

ACV, which operates the south-east Asian country’s web of airports, will spread capacity among second-tier locations, Huyen said. She said an air cargo terminal would be added in Hai Phong, for example, a northern city home to big factories for Apple suppliers and electric-car maker VinFast, as well as a massive seaport serving trade with China and other partners.

The aviation master plan is aimed at two sectors: the supply chains moving to Vietnam and the travel industry, which relies on the country’s tropical beaches, food and history to lure visitors.

Vietnam’s tourism industry is still recovering from Covid-19 and the restrictions put in place to stem the pandemic. As more travellers head to Vietnam, though, overloaded airports are not the face the country wants to show them. The master plan includes a $4bn Hanoi airport expansion, a third terminal at Tan Son Nhat and a second airport for the southern city. A person with knowledge of the new airport, dubbed Long Thanh, told Nikkei Asia that its biggest challenge would be linking it efficiently to downtown Ho Chi Minh City, 40km away, so that airlines will not refuse to fly there. The person also said most of Vietnam’s airports were over capacity.

But carbon emissions from flights are 100 times the amount from train, bus or shared car rides, according to a study in the journal Science. Air travel is even more inefficient on the short-haul flights that dominate Vietnam, where trips can take 40 minutes. The country aims to hit net zero emissions by 2050.

“When airports are continuously constructed in neighbouring provinces and cities, air transportation between these provinces will raise emissions,” University of Transport and Communications lecturer Nguyen Minh Hieu told Nikkei Asia.

Still, businesses see opportunities ahead. France Aviation Civile Services had an air traffic control contract with Tan Son Nhat, and project manager Marc Alvarez was in town last week scouting deals with other airports.

Vietnam “said they need to train more people because of the growth, so we can [offer] support with that”, he said in an interview at the France-Vietnam Airport Conference.

Another of the dozen French companies that sent representatives was JCDecaux, which provides airport advertising. Olivier Héroguelle, a managing director, told Nikkei Asia: “When we look at investing in Vietnam, it’s not for the five years to come, but for decades.”