Airfares are falling

At the General Meeting of Shareholders of Vietnam Airlines Corporation on June 21, Mr. Dang Anh Tuan, Deputy General Director of Vietnam Airlines, said that recently, airfares have increased by about 15-17% depending on the flight period, flight date and flight time.

Mr. Dang Anh Tuan, Deputy General Director of Vietnam Airlines Corporation, talked about the recent situation of airfare prices.

A month ago, airfares for general airlines were only 76% of the ceiling price, and some routes were only 43% of the ceiling price. But after the airline launched late-night and early-morning flights, ticket prices have cooled down somewhat.

Vietnam Airlines leaders emphasized that the airline does not have a monopoly but is in a highly competitive environment. In the international flight market, the airline is competing with about 52-53 airlines.

Therefore, balancing airfares with market demand needs to be carefully calculated. According to Mr. Tuan, airfare increases occur globally but the time and level of increase are different. Airlines must calculate to achieve the greatest efficiency and base on the purchasing power of the market. When supply and demand are equal, airfares will decrease.

Explaining the reason for the increase in airfares, Mr. Tuan said that in 2024, fuel prices alone increased by about 5.5-5.6 trillion VND in costs compared to the same period.

Currently, fuel prices continue to remain high at around 104 USD/barrel. With current production output, a change in fuel prices of 1 USD/barrel will cause Vietnam Airlines' operating costs to change by around 230 billion/year. This creates great pressure on the production and business activities of airlines in general and Vietnam Airlines in particular.

The difference in USD exchange rate caused the airline to lose an additional VND4.7 trillion compared to 2023. Not to mention other causes such as supply chain disruptions and lack of aircraft.

However, VNA leaders affirmed: "Increasing ticket prices also helps the airline offset part of its costs and start making a profit."

Regarding the shortage of aircraft in the aviation industry, Vietnam Airlines informed that there are currently more than 1,500 aircraft worldwide affected by the recall of Pratt & Whitney engines on A321/320 NEO aircraft. This causes instability and a shortage of aircraft resources, directly affecting the plan to operate, recover and expand the flight network after the pandemic.

Vietnam Airlines alone is grounding 11 aircraft and is expected to ground six more by the end of the year. The impact of the engine recall is expected to last until 2025, as aircraft engine repairs typically take more than 100 days.

To compensate for the shortage of aircraft and increase supply, Vietnam Airlines said it is applying many solutions. The company has reorganized production activities by rearranging and rescheduling operating hours and increasing aircraft usage hours to compensate for the shortage.

"In the first quarter of 2024, the operating flight hours of Vietnam Airlines' fleet will remain the same as the same period in 2023 in the context of a 20% decrease in total supply," said Mr. Le Hong Ha, General Director of Vietnam Airlines.

In addition, the airline is working with manufacturers to find solutions to quickly complete engine repairs, have additional backup plans, and lease aircraft. According to the plan, from now until the end of the year, the airline will receive more aircraft to supplement supply.

Vietnam Airlines also plans to reduce the frequency of some inefficient flights, arranging aircraft at night or early morning to increase operational efficiency.

Source: https://www.baogiaothong.vn/gia-ve-may-bay-dang-giam-dan-192240621121742118.htm