The Ministry of Transport has sent a document to related ministries and sectors to gather feedback on the draft Circular amending and supplementing certain provisions of Circular No. 17/2019 on the price framework for passenger transportation services on domestic air routes.
According to the proposal, the prices for economy class airfares on four domestic air routes are suggested to increase by 2.27-6.67%, with an average increase of 3.75%.
Specifically, the price ceiling for airfares on routes with distances below 500 kilometers remains unchanged at 1.6 million Vietnamese dong per ticket per leg for economically and socially developed routes, and 1.7 million Vietnamese dong per ticket per leg for other routes below 500 kilometers, as it is currently.
For the remaining four groups of routes, economy class fares are proposed to increase by 50,000 to 250,000 Vietnamese dong per ticket per leg, depending on the distance of each route.
The maximum service price includes all passenger costs for one air ticket, excluding value-added tax and revenue collected by service providers for passenger terminals and security services such as passenger service charges and security fees for baggage.
However, this maximum service price does not include additional service charges for extra services. These charges are determined by airlines based on the balance between their service capabilities and market demand.
Previously, the Civil Aviation Authority stated that the current price ceiling for domestic airfares, as stipulated in Circular 17/2019, has been in effect since 2015. At that time, the price of Jet A1 fuel was only $60 per barrel.
Nowadays, both fuel prices and exchange rates have increased significantly, rendering the current maximum prices no longer appropriate.
The Civil Aviation Authority clarified that raising the price ceiling for domestic airfares does not imply that airlines will uniformly increase ticket prices.
On the contrary, this policy will create conditions for airlines to implement flexible pricing policies, expanding the range of ticket prices and introducing more programs and policies that meet the needs of passengers.
@Zing News
Source: Vietnam Insider