National Assembly finalizes ceiling on airfares and textbooks

Airline tickets and textbooks continue to be capped by the State to have a management tool, ensuring people's access to services, especially low-income groups.

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

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

In the report on acceptance and explanation before the National Assembly pressed the button, the National Assembly Standing Committee explained that there are currently 6 airlines operating domestic routes, but in reality, 3 major airlines still hold the market share, of which Vietnam Airlines has about 35%, Vietjet Air 40% and Bamboo Airway 16%.

According to the Competition Law, this market has limited competition, and in the short term, the State still needs tools to manage domestic aviation service prices to stabilize the market. In the long term, when all types of transportation develop synchronously and there are many options, the State will calculate and regulate appropriate domestic air passenger transport service prices.

The regulation of ceiling prices for air tickets still ensures the initiative of businesses. Because, currently, airlines have full authority to decide service prices, including air ticket prices, only economy class ticket prices cannot exceed the ceiling price.

"If there is no price ceiling, it means the State has abandoned the price regulation tool. Airlines can completely offer high airfares for economy class tickets, especially during holidays, Tet, and tourist seasons when travel demand increases. This affects people, especially those with low incomes who have difficulty accessing aviation services, increasing social costs," the National Assembly Standing Committee explained.

The ceiling price of domestic airfares has remained unchanged for 8 years, the Ministry of Transport plans to increase the ceiling, with an average increase of 3.75% compared to the current level. For flights over 1,280 km, the ceiling price can reach up to 4 million VND per way.

National Assembly deputies press the button to pass the bill. Photo: Hoang Phong — National Assembly deputies press the button to pass the bill. Photo: *Hoang Phong*

The law passed today also stipulates a price ceiling for textbooks. The Standing Committee explained that textbooks are essential goods with a large consumption volume and the price of these goods directly affects the majority of people, including low-income earners.

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 there is no negative impact on people.

Regarding electricity, the State still sets the price of this item. The National Assembly Standing Committee explained that pricing is the State's highest level of regulation of the prices of goods and services to ensure the goals of limiting monopoly and people's lives.

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

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

The Law on Prices (amended) was passed and also removed pork and milk for the elderly from the list of goods and price stabilization after receiving opinions from National Assembly deputies and the National Assembly Standing Committee.

Mr. Minh

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