Raising the ceiling, airfares can go up to 4 million VND/way

The Ministry of Transport is currently seeking feedback on amendments to several articles of Circular No. 17/2019 regarding the pricing framework for passenger transportation services on domestic routes. The new circular is expected to be issued in the near future.

Airfare prices are a "difficult problem to solve" for the tourism industry.

Specifically, the price ceiling for routes with a distance of less than 500 km remains unchanged at 1.6 million VND/one-way ticket for routes contributing to socio-economic development and 1.7 million VND/one-way ticket for other routes under 500 km.

For routes between 500 km and under 850 km, the price ceiling increased by 50,000 VND/one-way ticket, from 2.2 million VND to 2.25 million VND, a 2.27% increase. For routes between 850 km and under 1,000 km, the price ceiling increased from 2.79 million VND to 2.89 million VND/one-way ticket (a 3.58% increase).

For flight distances between 1,000 km and under 1,280 km, the Ministry of Transport proposes a maximum price of 3.4 million VND/one-way ticket, 200,000 VND higher than the current regulation (a 6.25% increase). The final group – flight distances of 1,280 km or more – is proposed a price of 4 million VND/one-way ticket, 250,000 VND higher than the current regulation of 3.75 million VND. This is also the group with the most significant proposed price increase, at 6.67%.

The aforementioned maximum price includes all costs that passengers must pay for an air ticket, excluding: value-added tax; fees collected on behalf of the airport, including passenger service fees and passenger and baggage security fees; and service charges for additional items. The maximum service charge also does not include service charges for additional items.

The Ministry of Transport is currently seeking feedback on a draft circular regarding the ceiling price for domestic economy class airfares.

These prices are determined by airlines based on a balance between their service capacity and market demand. Airlines set specific fares on routes or groups of routes using a diversified pricing system for each route and a policy of regular price reductions for citizens and soldiers residing in remote, border, and island areas.

The Ministry of Transport stated that the adjustment of air transport service price frameworks aims to ensure compliance with pricing principles stipulated in the law on pricing, while also being cautious, transparent, and carefully considering the appropriate level and timing of adjustments to ensure macroeconomic stability and inflation control.

According to representatives from several travel companies, if enacted, the new price ceiling regulation will have a significant impact on the aviation and tourism markets. The most popular tourist routes, such as Hanoi - Ho Chi Minh City and Hanoi - Phu Quoc, are among those experiencing the sharpest price increases, meaning the cost of travel for tourists will rise, affecting their choice of destinations.

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