Higher domestic airfare caps likely
HCMC – The Ministry of Transport is currently gathering feedback on a draft circular in which domestic
HCMC - Vietnam Airlines has proposed that the Civil Aviation Authority of Vietnam raise airfare caps by VND50,000-250,000 per passenger, the local media reported.
The national flag carrier proposed raising the airfare caps to VND2.25 million per ticket from VND2.2 million per ticket for air routes with a distance between 500 and 850 kilometers and to VND2.89 million per ticket from VND2.79 million per ticket for air routes between 850 and 1,000 kilometers.
Besides this, Vietnam Airlines proposed setting the floor prices of air tickets, which would be equivalent to 35% of the airfare caps or of the average variable cost per seat of low-cost air carriers.
As such, the floor prices of air tickets would be VND570,000-787,500 per ticket for air routes with a distance between 500 and 850 kilometers and VND755,000-1,000,000 per ticket for air routes between 850 and 1,000 kilometers. The current floor price of air tickets is zero dong.
A representative of Vietnam Airlines said raising airfare caps and setting floor prices will help prevent local airlines from dumping air tickets and reduce the competitiveness in the local aviation market. This will also help local airlines recover from the Covid-19 pandemic.
However, an aviation expert said if Vietnam Airlines’ proposal is approved, there will no longer be zero-dong and VND79,000 air tickets. Raising airfare caps and setting floor prices will reduce competitiveness in the local aviation market, affecting travel companies and consumers, he said.