In early March 2020, the Civil Aviation Authority issued a document proposing to amend and supplement a number of articles of Circular 17/2019 of the Ministry of Transport promulgating the price framework for transportation services to the 2014 level (an average increase of 3.75% compared to the current price framework). Accordingly, the Authority proposed to increase the ceiling price for flights with a transport distance of 500-850 km from VND 2.2 million to VND 2.25 million (an increase of 2.27%).
However, recently, the Civil Aviation Authority of Vietnam has proposed that the Ministry of Transport temporarily not consider adjusting the price framework for domestic passenger transport services in order to stabilize prices and limit negative impacts on social life in the context of the complicated developments of the Covid-19 epidemic.
Domestic flights at this time have few passengers.
According to the Civil Aviation Authority, the Covid-19 pandemic has negatively impacted air transport, causing Jet A1 fuel prices to decrease. “During the period of stable market development (before the pandemic), basic fuel prices tend to increase. Therefore, policy development needs to consider the upward trend of jet fuel prices when the market gradually recovers,” said the leader of the Civil Aviation Authority.
Looking at the current period, with the severe impact of the Covid-19 epidemic, passenger output, seat utilization ratio and revenue of airlines have seriously decreased. However, the Civil Aviation Authority assessed that a series of other costs have increased, such as costs for ensuring epidemic prevention and safety, aircraft parking costs, etc., causing costs per flight and per passenger to increase.
Currently, airline ticket prices are being implemented flexibly by airlines, with many different price ranges from low to high.
According to Vietnam Airlines, increasing the ceiling fare does not mean increasing ticket prices, but helps Vietnam Airlines and other Vietnamese airlines continue to implement flexible fare policies, upgrade service quality for customers with high service needs, and offer more cheap fares to stimulate demand and encourage air travel.
