The Ministry of Transport (MOT) has stated that since the beginning of this year, the average price of economy-class tickets on some routes (including taxes and fees) from Vietnamese airlines has increased compared to the same period last year.
The increase in airfares of airlines is part of a global trend. Photo: CAAV.
The MOT recently issued a written response to voters in Ho Chi Minh City regarding the high airfare prices and a request to review the fee components included in the ticket prices.
According to the ministry, the cost structure for a flight operated by Vietnamese airlines in 2023 includes fuel costs accounting for 37-42% of total expenses, aircraft-related costs (equipment, repair, and maintenance) accounting for 32-41%, and flight service costs (ground handling, air traffic control, etc.) accounting for 6-7%.
Additionally, other costs such as direct labor, sales, management, and passenger service expenses make up 16-19% of the total. Flight service costs (ground handling, air traffic control, etc.) are relatively small, around 6-7% of the total cost per flight, and have minimal impact on overall cost increases.
Certain service charges are regulated by the Ministry of Transport in Circular No. 53/2019/TT-BGTVT, issued on December 30, 2019, which sets prices and price ranges for some specialized aviation services at airports in Vietnam. In reality, most services governed by this circular have remained stable for a long time without any price adjustments.
The MOT noted that, since the beginning of the year, the average price of economy-class tickets on some routes (including taxes and fees) has increased compared to the same period in 2023.
However, the ministry’s inspections of the ticket sales activities of Vietnamese airlines found that they are adhering to regulations regarding the maximum price for basic economy class on domestic routes.
The ministry explained that the increase in airfare is in line with a global trend driven by several factors, including market supply-demand dynamics (such as a reduction in the number of aircraft in operation and increased travel demand during holidays), rising fuel costs, and exchange rate fluctuations.
Of note, up to 80% of airline costs are related to foreign currency. In July, the USD/VND exchange rate reached a historic high (with a selling rate of 1 USD = 25,470 VND), up 7.45% compared to the same period in 2023 and 10.25% compared to the same period in 2021.
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Source: Vietnam Insider