The National Assembly Standing Committee agreed to remove the floor price and keep the ceiling price for air tickets.

Reporting to the National Assembly on the afternoon of May 23, Chairman of the Finance and Budget Committee (the agency examining the draft law) Le Quang Manh said that the Government's viewpoint is to propose maintaining the ceiling price regulation and removing the floor price regulation for domestic air passenger transport. The majority of delegates also agreed with this proposal.

Chairman of the National Assembly's Finance and Budget Committee Le Quang Manh. (Photo: Quochoi.vn)

Regarding the removal of floor prices, Mr. Manh explained that, based on the summary of the Law on Civil Aviation, the Ministry of Transport proposed to remove the regulations on floor prices to create a mechanism to encourage competition, reduce service prices, protect the interests of consumers, especially low-income people to access aviation services; reduce social costs, and promote economic development.

Removing the floor price opens up opportunities for businesses to compete, but it does not mean that businesses have the right to compete unfairly, because even if businesses lower their prices, they still have to comply with the provisions of the Competition Law.

Regarding practical impact, in fact, removing the floor price does not affect aviation businesses because in recent years, the floor price in the price range has been set at 0 (Clause 2, Article 3 of Circular No. 17/2019/TT-BGTVT) of the Ministry of Transport .

Regarding the impact on state budget revenue, removing the floor price will bring many opportunities for people, promote the development of the domestic aviation market, create vibrant competition; thereby, increasing the number of people using aviation services, contributing to increasing revenue and profits for airlines, thereby increasing state budget revenue.

Mr. Manh also explained 4 reasons for maintaining the ceiling price for air tickets. Accordingly, based on Point d, Clause 1, Article 21 of the Draft Law, domestic air passenger transport services that meet the legal criteria are goods and services whose prices are set by the State, which are: "essential goods and services, with a monopoly in trading or a limited competitive market and affecting the socio-economy, people's lives, and production and business activities". Currently, as society develops more and more, this service is essential, with a very large impact on people's lives, production and business.

Along with the proposal to remove the floor price, if there is no ceiling price regulation, it means that the State will remove the regulatory tool and let service providers have full authority to decide the service price. Airlines can completely set service prices, including airfares at high levels, affecting the interests of consumers, production and business, and affecting society.

It is necessary to clearly distinguish whether the problem is due to the implementation organization or the law. According to current regulations, to ensure proactiveness, flexibility, and timeliness, the authority to adjust the price framework has been assigned to the Government. If the price framework is not suitable to reality at times, the reason is due to the untimely implementation organization; not due to the provisions of the Law.

Therefore, if the ceiling price is found to be inappropriate, the affected parties have the right to request the Government to promptly adjust it. Recently, many airlines have suffered losses due to many reasons, the main reason being the negative impact of the COVID-19 pandemic.

" Removing the regulation on price ceilings is a big issue, changing an important policy and according to the Law on Promulgation of Legal Documents, the impact must be carefully assessed; while the impact has not been assessed, there is not enough basis for amendment ," Mr. Manh stated the opinion of the National Assembly Standing Committee.

Speaking at the meeting, Minister of Finance Ho Duc Phoc also said that keeping the ceiling price helps reduce social costs, promote economic development, and create conditions for everyone to access domestic aviation services. Regarding the floor price, through international experience, many countries in the world have removed the floor price, airlines have a very wide price range for many types of flights, many ticket classes, the drafting agency agreed to remove the floor price for this service.

Minister of Finance Ho Duc Phoc. (Photo: Quochoi.vn)

Previously, while giving comments on the draft Law on Prices (amended), delegate Ta Van Ha (Quang Nam Province National Assembly Delegation) proposed to remove the ceiling and floor prices for air tickets. According to Mr. Ha, if the ceiling and floor prices are kept, it will not be consistent with the spirit of Resolution 11, the 5th Conference of the 12th Party Central Committee. In addition, removing the ceiling and floor prices for air tickets will also create healthy competition between other types of transport, ensuring the international commitments that Vietnam has participated in.

" Air transport is not an essential service. Like rail transport, carriers must have fair competition in transport services, reflecting market regulations and the laws of supply and demand.

Therefore, not regulating ceiling and floor prices for air tickets will create conditions for airlines to implement flexible fare policies, offer many suitable price programs, increase cheap prices to stimulate demand and encourage people to use the service, " Mr. Ha commented.

Delegate Ta Van Ha. (Photo: Quochoi.vn)

Regarding this issue, delegate Nguyen Thanh Nam (Phu Tho delegation) said that it is necessary to ensure healthy competition in providing domestic passenger and aviation transport services.

Mr. Nam agreed with the explanation of the National Assembly Standing Committee that to protect the interests of consumers, especially those with low incomes, to access aviation services, thereby reducing social costs and promoting economic development, it is necessary to have State regulation to ensure healthy competition and not cause negative impacts on aviation businesses.

Delegate Nguyen Thanh Nam. (Photo: Quochoi.vn)

However, in domestic air passenger transport services, there are many different classes, serving many different customer groups. Delegates suggested that it is necessary to clearly stipulate in the draft law that only economy class domestic air passenger transport services are included in the list of services priced by the State, while business class and premium economy classes are left to businesses to set their own prices according to the market mechanism, to ensure healthy competition, provide increasingly better services, and meet the increasing demands of the people.

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Source: https://vtc.vn/thuong-vu-quoc-hoi-dong-y-bo-gia-san-giu-gia-tran-ve-may-bay-ar784696.html