Vietnam's Gia Lai Province Plans VND 94.9 Billion Annual Subsidy to Attract International Charter Flights to Phu Cat Airport
Why It MattersThe plan shows how emerging tourism regions may use time-limited state subsidies to seed nascent charter demand before expecting routes to sustain themselves commercially through market forces.
What happened
The People's Committee of Gia Lai has submitted a proposal to the Standing Committee of the Provincial Party Committee requesting approval to present a draft Resolution to the Provincial People's Council, aimed at attracting international tourists via non-scheduled international charter flights to Phu Cat Airport over 2026–2027. Under the proposed policy, travel businesses operating international tourism services in Gia Lai would receive a subsidy of 200 million VND per charter flight to Phu Cat Airport, while international travel agencies organizing tours for arriving charter tourists would also receive a 50% subsidy on entrance fees or ticket prices at three designated sites: the Science and Innovation Discovery Center, the Twin Towers, and the Banh It Tower. Businesses would additionally receive support in promotion and advertising through mass media and government channels, plus exposure at investment, trade, tourism, and foreign affairs events organized by the province.
The total budget allocated for the policy is projected at VND 94.947 billion per year, with over VND 4.3 billion earmarked for 2026 and over VND 90.6 billion for 2027. The Gia Lai Provincial People's Committee describes the measure as a new policy with no precedent in the province. Provincial authorities stated that the subsidy is intended as seed capital during the market formation phase, not as a long-term sustaining mechanism; after 2027, the goal is for air routes to become self-sufficient through market forces, with state budget support limited to promotion rather than regular operational subsidies.
International tourists visiting Gia Lai currently number around 125,000 in 2025, representing just over 1% of the province's total 12.4 million visitors. Phu Cat Airport is undergoing major upgrades: a second runway and associated facilities, representing an investment of over 3,000 billion VND, have been largely completed, with commissioning targeted for October 2026. The Vietnam Airports Corporation (ACV) is also renovating Terminal T2's air conditioning system at a cost of over 5 billion VND, expected to be completed in September 2026, after which the terminal is expected to handle approximately 600 passengers per hour during peak times for charter flights. On September 18, 2026, a Gulfstream G700 business jet landed at Phu Cat Airport, which provincial officials described as a signal of the destination's growing appeal. Gia Lai is also preparing infrastructure to host the APEC Senior Officials' Informal Meeting (ISOM).
Industry impact & what to watch
This is a case of a provincial government using direct cash subsidies to try to create charter demand where none currently exists at scale — international visitors make up just over 1% of Gia Lai's total tourist count, so the subsidy targets a segment the province views as underdeveloped rather than one already showing organic growth. Structuring the payment per flight, alongside site-fee discounts for inbound tour operators, is a fairly direct way to lower the marginal cost of testing a route before any scheduled service or sustained charter pattern exists.
The self-imposed sunset after 2027 is the detail worth tracking: provincial authorities have framed the funding as seed capital for a market-formation phase, with the explicit expectation that routes become commercially self-sufficient afterward and that ongoing state support narrows to promotion only. That framing puts the burden on the concurrent infrastructure work — the second runway targeted for commissioning in October 2026 and the Terminal T2 upgrade expected in September 2026, which is meant to lift peak handling to about 600 passengers per hour — to actually convert subsidized charter traffic into a durable pattern before the subsidy tapers off.
What happens between now and the 2027 budget allocation being spent will be the test: whether the Provincial People's Council approves the draft Resolution, how many operators actually take up the 200 million VND per-flight subsidy once the runway and terminal work is finished, and whether the isolated Gulfstream G700 arrival becomes a recurring pattern rather than a one-off signal cited by officials.
