Travel
Vietnam authority proposes unchanged airfare price cap for local flights
Airfare ceiling for domestic flights should remain unchanged, according to a recent proposal of the Civil Aviation Authority of Vietnam (CAAV).
The CAAV has just suggested the Ministry of Transport (MoT) retain the airfare price cap until 2019, local media reported.
According to the CAAV, the maximum airfares declared by airlines have been equivalent to 76-79% of the current cap, depending on flight routes. The adjustment of the price frame is necessary, especially for long routes as fuel costs fluctuate, according to the authority.
However, the CAAV still recommends keeping the cap unchanged until 2019, which is in line with State direction on price stabilization and ensure the inflation target for 2018.
Currently, the cap on domestic airline tickets has been in place since 2015.
Specifically, the airfares’ cap for the flights of socio-economic development with a route of under 500 km is VND1.6 million (~US$70). For other flights shorter than 500 km, from 500 km to 800 km, from 850 km to 1,000 km, from 1,000 km to 1,280 km and more than 1,280 km, the prices are capped at VND1.7 million(US$74), VND2.2 million(US$96), VND2.79 million(US$121), VND3.2 million (US$139) and VND 3.75 million (US163), respectively.
In a related move, Vietnam’s Ministry of Transport in 2017 has rejected a bid to set price floors on air tickets as proposed by the country’s national carrier, Vietnam Airlines, as well as its subsidiary, Jetstar Pacific. Under the proposals, Vietnam Airlines advocated for a floor price for domestic travel between US$68 (VND1.5 million) and US$185 (VND4.2 million), while Jetstar Pacific proposed rates between US$26 (VND600,000) and US$53 (VND1.2 million).
According to the CAAV, the maximum airfares declared by airlines have been equivalent to 76-79% of the current cap, depending on flight routes. The adjustment of the price frame is necessary, especially for long routes as fuel costs fluctuate, according to the authority.
Airfare price is stabilized. Photo: Xuan Hoa
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Currently, the cap on domestic airline tickets has been in place since 2015.
Specifically, the airfares’ cap for the flights of socio-economic development with a route of under 500 km is VND1.6 million (~US$70). For other flights shorter than 500 km, from 500 km to 800 km, from 850 km to 1,000 km, from 1,000 km to 1,280 km and more than 1,280 km, the prices are capped at VND1.7 million(US$74), VND2.2 million(US$96), VND2.79 million(US$121), VND3.2 million (US$139) and VND 3.75 million (US163), respectively.
In a related move, Vietnam’s Ministry of Transport in 2017 has rejected a bid to set price floors on air tickets as proposed by the country’s national carrier, Vietnam Airlines, as well as its subsidiary, Jetstar Pacific. Under the proposals, Vietnam Airlines advocated for a floor price for domestic travel between US$68 (VND1.5 million) and US$185 (VND4.2 million), while Jetstar Pacific proposed rates between US$26 (VND600,000) and US$53 (VND1.2 million).
