Transport ministry wants careful evaluation on the impact of airfare hike

11-Sep-2021 Intellasia | VNS | 5:02 AM Print This Post

The Ministry of Transport wants to make a careful evaluation of the impact of airfare increases on society before issuing the policy, it said in feedback to a proposal to increase the minimum airfare for domestic flights by the Civil Aviation Authority of Vietnam (CAAV).

As the aviation industry is facing financial difficulty due to the prolonged pandemic, some airlines earlier urged the authority to raise floor prices on air tickets.

After the meeting on price management in the second quarter, deputy prime minister Le Minh Khai on August 24 asked the Ministry of Transport to set the airfare for domestic flights in accordance with the law on aviation and the law on price to harmonise the needs of customers, airlines and the State.

The CAAV is tasked with proposing a price bracket for domestic flights from November 1, 2021.

“The Civil Aviation Administration has submitted its plan to the Ministry of Transport. However, as this is a matter of great impact, the ministry’s view is very careful, impartial and based on scientific calculations, especially taking account of relevant legal regulations, impacts on the market and people, as well as the interests of the State and aviation enterprises,” the ministry said in its statement on Tuesday.

In addition, the ministry needs to carefully assess the impact of the COVID-19 pandemic on the entire aviation industry in both the previous and next periods, it said.

The ministry is also directing advisory agencies to study and outline plausible scenarios and options including specific impact assessment and consult relevant ministries, organisations, experts and citizens for consideration.

In its draft circular sent to the ministry on August 31, CAAV proposed to apply a minimum price equal to 20 per cent of the maximum regulated price.

Specifically, for routes below 500km, the minimum proposed worth is VND320,000 (US$14) for a one-way ticket for the group of socio-economic growth and the ceiling price is VND1.6 million. For other routes below 500km, the minimum price is VND340,000 (US$14) and the highest rate is VND1.7 million.

For flights of 500-850km or more, the floor price is between VND440,000 and VND750,000 per one-way ticket. If this proposal was approved, there would be no more “zero-dong” tickets.

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Category: Business, Vietnam

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