National Assembly finalizes ceiling on airfare and textbook prices

Airline tickets and textbooks continue to be subject to price caps by the government as a means of management, ensuring people's access to services, especially for low-income groups.

On the afternoon of June 19, the National Assembly passed the amended Law on Prices with nearly 93% of delegates voting in favor. This law will take effect from July 1, 2024.

According to the law passed, the State still regulates the price range for airline tickets, meaning it imposes a price ceiling on this commodity.

In its report summarizing the feedback received before the National Assembly voted, the Standing Committee of the National Assembly explained that currently there are 6 airlines operating domestic routes, but in reality, the market share is still held by 3 major airlines, with Vietnam Airlines at approximately 35%, Vietjet Air at 40%, and Bamboo Airways at 16%.

According to the Competition Law, this market has limited competition, and for the time being, the State still needs tools to manage the prices of domestic air services to stabilize the market. In the long term, when other modes of transportation develop synchronously and offer more choices, the State will consider regulating appropriate prices for domestic air passenger transport services.

The regulation of airfare price caps still ensures the autonomy of businesses. Currently, airlines have full control over pricing services, including airfares, with only economy class fares not allowed to exceed the price cap.

"If there is no price ceiling, it means the State is abandoning its price regulation tool. Airlines can completely set high airfares for economy class tickets, especially during holidays, Tet (Lunar New Year), and peak travel seasons when demand is high. This affects the people, especially those with low incomes, making it difficult for them to access air travel services, thus increasing social costs," the National Assembly Standing Committee explained.

The ceiling price for domestic airfares has remained unchanged for the past 8 years. The Ministry of Transport plans to increase this ceiling by an average of 3.75% compared to the current price. For flights over 1,280 km, the ceiling price could reach 4 million VND per one-way trip.

Members of Parliament press the button to approve the draft law. Photo: Hoang Phong — Members of Parliament press the button to approve the draft law. Photo: *Hoang Phong*

The law passed today also stipulates a price ceiling for textbooks. The Standing Committee explained that textbooks are essential goods with very high consumption volumes, and their prices directly affect a large number of people, including those with low incomes.

Currently, publishers still add book distribution costs and very high discounts (28-35% of the cover price) when calculating the price of textbooks, leading to the price of this item being pushed up compared to the income of many people. Therefore, it is necessary to have control tools to ensure that it does not negatively impact the people.

Regarding electricity, the State still sets prices for this commodity. The Standing Committee of the National Assembly explained that price setting is the highest level of regulation by the State over the prices of goods and services to ensure the objectives of limiting monopolies and improving people's lives.

According to Article 30 of the Electricity Law, electricity prices are adjusted based on cost factors, and the extent and timing of price changes are considered in the context of the country's socio-economic development and people's incomes.

Thus, when using pricing measures, the State has taken into account the goal of harmonizing the interests of all parties, including the goal of stabilizing prices in accordance with the socio-economic context.

The amended Law on Prices, which was passed, also removed pork and milk for the elderly from the list of goods subject to price stabilization after incorporating feedback from National Assembly deputies and the Standing Committee of the National Assembly.

Mr. Minh

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