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May 18, 2021 / 16:00

Vietnamese airlines increase fees to cope with Covid-19

The resurgence of Covid-19 outbreak is hurting local airlines again this year.

A number of Vietnamese airlines have simultaneously increased fees amid the fresh outbreak of the novel coronavirus that the move would help them improve service quality, especially the operation of the ticketing system.

 Vietnam Airlines is among carriers facing difficulties due to the fourth wave of Covid-19. Photo: Vietnam Airlines

Increase fee to improve service quality

Specifically, from May 9, Vietnam Airlines, Pacific Airlines, Vasco, and Bamboo Airways increased system administration fee to VND350,000 (US$15.2)-VND450,000 (US$19.5) per domestic flight including value-added tax, an increase of VND100,000 (US$4.3) per flight. 

Bamboo Airways, the novice air carrier, applied the fee from VND370,000 (US$16) to VND460,000 (US$20) for groups and from VND320,000 (US$13.9) to VND410,000 (US$17.8) for individuals, from May 10.

Local experts believed that the move of the airlines is aimed at offsetting the impacts of the disease. 

“The fee hike is completely normal when the airlines have to cope with the re-emergence of Covid-19,” Dr. Nguyen Huu Duc, a Vietnamese traffic expert, told Hanoitimes

Under the current difficult situation, it is imperative that airlines try to save themselves. So, even know that any plan has the potential for both success and failure, but still, they have to try,” said Duc.

Some airlines are facing difficulties, even going bankrupt. It is time for air carriers and passengers to shoulder together the consequences brought by the pandemic, according to the traffic expert.

“It is necessary to let the market mechanism decide. If passengers find the increase acceptable, then they continue to use the service. Otherwise, the airlines have to consider other options,” Duc said.

However, the hike of fees implies many risks. “This is, in fact, a way to increase airlines revenue to offset the damage caused by the pandemic. It could bring short-term benefit for the airlines,” local economist Ngo Tri Long told Hanoitimes. 

However, the new move can negatively affect domestic consumers. “How will the quality of service be improved?” he questioned. “It is still not clear.”

Service quality - the only reason for the increase

In a surprise move, on May 14, the Civil Aviation Authority of Vietnam (CAAV) proposed removing price caps for domestic air routes operated by more than three air carriers. 

“The removal of the ceiling prices will help increase the competition among the airlines,” the CAAV noted in its report to the Ministry of Transport.  

From a lawyer’s view of point, Mai Thi Thao, Deputy Director of TAT Law Firm, said that, with such a proposal, the cost of airfare would certainly increase, leading to the hike in prices of tours and other services. 

“This is not good for consumers and eliminate the competition among local airlines,” Thao told Hanoitimes.