VI
EN
In early March 2020, the Civil Aviation Authority issued a document proposing amendments and additions to several articles of Circular 17/2019 of the Ministry of Transport, which promulgates the price framework for transportation services, bringing it back to the 2014 regulations (an average increase of 3.75% compared to the current price framework). Accordingly, the Authority proposed increasing the ceiling price for routes with a transport distance of 500-850 km from 2.2 million VND to 2.25 million VND (an increase of 2.27%).
However, recently, the Civil Aviation Authority of Vietnam proposed to the Ministry of Transport to temporarily postpone considering adjustments to the price framework for domestic passenger transport services in order to stabilize prices and limit negative impacts on social life amidst the ongoing complexities of the Covid-19 pandemic.
Domestic flights at this time all have very few passengers.
According to a report from the Civil Aviation Authority, the Covid-19 pandemic has negatively impacted air transport, causing Jet A1 fuel prices to fall. “During periods of stable market development (before the pandemic), basic fuel prices tended to increase. Therefore, policy formulation needs to consider the potential for a return to upward trends in aviation fuel prices as the market gradually recovers,” a leader from the Civil Aviation Authority stated.
Looking at the current situation, with the severe impact of the Covid-19 pandemic, passenger volume, seat occupancy rates, and revenue of airlines have decreased significantly. However, the Civil Aviation Authority assesses that a series of other costs have increased, such as costs for ensuring safety and preventing the spread of the disease, aircraft parking fees, etc., leading to higher costs per flight and per passenger.
Currently, airlines are implementing flexible pricing mechanisms, offering a wide range of prices from low to high.
According to Vietnam Airlines, the increase in the fare ceiling does not mean an increase in airfares, but rather helps Vietnam Airlines and other Vietnamese airlines continue to implement a flexible pricing policy, upgrade service quality for customers with high service demands, and offer more affordable fare options to stimulate demand and encourage air travel.
