Ministry of Construction talks about high domestic airfares

According to the Ministry of Construction, the cost of a flight, the cost of fuel, and the cost of renting, purchasing, and maintaining aircraft... account for 70-80% of the cost, but are affected by exchange rates and are beyond the control of the airline.

The Ministry of Construction has just provided feedback on a coordinated solution to reduce airfares to a reasonable and stable level, to help improve the competitiveness of Vietnam tourism. According to the ministry, airfares are affected by fluctuations in cost-forming factors and fluctuations in market supply and demand.

Specifically, in the cost structure of a flight, the cost of fuel and the cost of renting, purchasing, repairing and maintaining aircraft account for 70 - 80% of the total cost; almost all of these costs are paid in foreign currency and are directly affected by exchange rate fluctuations.

Passengers increase at Noi Bai airport on the occasion of April 30 and May 1

PHOTO: NIA

Jet fuel prices and exchange rates are two cost factors that are greatly affected by the domestic and international macroeconomic and political situation, beyond the control of airlines and specialized management agencies.

On the other hand, airfares, like the prices of most other goods and services on the market, operate according to the laws of supply and demand.

The Ministry of Construction also cited that during peak periods (holidays, Tet, long breaks), on some domestic flights in Vietnam, airfares are higher than usual when travel demand increases, while the number of seats provided by airlines is limited due to the dependence on the number of aircraft and operating conditions.

To reduce airfares to a reasonable level and enhance the competitiveness of Vietnamese tourism, the Ministry of Transport (now the Ministry of Construction) issued Decision No. 1723 promulgating the maximum price for basic economy class domestic air passenger transport services sold within Vietnam.

Accordingly, Vietnamese airlines have built flexible ticket prices with many price ranges from low to high depending on the market situation (supply - demand), ticket conditions, ticket issuance time, service quality... ensuring that they do not exceed the maximum price prescribed.

The Ministry of Construction has also directed the Civil Aviation Authority of Vietnam to deploy solutions aimed at supplementing and balancing the supply capacity between domestic and international routes of Vietnamese airlines, supporting airlines to increase their operating capacity, in accordance with market times.

According to the ministry, key solutions are implemented by state management agencies through effective coordination of operational plans. Support and facilitation for airlines to add aircraft, increase transport forces and load supply on flight routes...

According to a survey by Thanh Nien , in July, ticket prices to tourist destinations such as Phu Quoc are very high. Vietnam Airlines' economy class tickets from Hanoi to Phu Quoc from July 15 to 20 have the lowest price of 3.5 - 4.5 million VND/trip. Passengers will have to pay an average of 7 - 8 million VND for a round-trip ticket on this route.

Vietjet Air has lower ticket prices, but at least 5 - 6 million VND/round trip Hanoi - Phu Quoc.

Source: https://thanhnien.vn/bo-xay-dung-noi-ve-viec-gia-ve-may-bay-noi-dia-neo-cao-18525063019043753.htm