The ACV made just $1 per passenger from retail services last year, far behind regional operators.
Despite robust growth in passenger numbers, the state-owned Airports Corporation of Vietnam (ACV), which operates the country’s civilian airports, generated only $81 million from non-aeronautical businesses such as airport retail in 2016, or 15 percent of the annual target.
Industry experts said the airport operator’s revenue mainly comes from the aeronautical sector such as landing fees and passenger service charges. Meanwhile it hasn't focused enough on non-aeronautical business, especially the airport retail business.
The operator estimated its revenue from retail at $1 per passenger last year, far below the average of other airport operators in Asia that reached up to $12.
Thailand’s AOT and Malaysia’s BHD raked in $4-5 per passenger last year.
The ACV, which operates 22 civilian airports in Vietnam, recorded significant growth in passenger traffic in 2016 to an estimated 81 million, with Vietnam’s airline market developing at the third-fastest pace in the Asia-Pacific region.
According to market research group Nielsen, Vietnam’s airline market will be fueled by the middle and affluent class which is forecast to rise from 12 million people in 2014 to 33 million by 2020.
However, ACV revenue lags behind it's Thai counterpart even after factoring differences in passenger traffic. As of the end of the third quarter of 2016, the ACV’s annual revenue was only equal to 40 percent of Thailand’s airport operator AOT while passenger traffic made up as much as 68 percent.
The proportion of international arrivals at Vietnam’s airports is about 30 percent of total passenger traffic, compared to 58 percent in Thailand and 48 percent in Malaysia, while service charges on international travelers are higher than those for domestic passengers. That partly explains why the ACV is so far behind many of its competitors in the region in terms of revenue.
Airports Corporation of Vietnam, which is currently valued at $1.2 billion, is one of Vietnam’s biggest state-owned enterprises.
Last year, the ACV raised $51.6 million by selling a 3.47 percent stake in an initial public offering where foreigners snapped up 82 percent of the shares on offer.
France's Aeroports de Paris SA has emerged as the front-runner to buy a 20 percent stake in the HoChi Minh City-based company, according to the Transport Ministry. The deal is scheduled to take place in March.