No increase in domestic airfares

According to the draft circular regulating the price range for passenger transport services on domestic flights that is being consulted by the Ministry of Transport, the ceiling price range for air tickets remains the same as the regulations from August 2015.

Specifically, the basic economy class domestic airfares sold within Vietnam remain at the maximum level for the following 5 flight groups:

- Flights with a distance of less than 500km belonging to the group of socio-economic development routes (flights to remote areas, border islands and operated by only one airline) are 1.6 million VND/ticket/way. Other flight groups under 500km are 1.7 million VND/ticket/way.

- Flights with distance from 500km to under 850km have maximum ticket price of 2.2 million VND/ticket/way.

- Flights with distance from 850km to under 1,000km have maximum ticket price of 2.79 million VND/ticket/way.

- Flights with distance from 1,000km to under 1,280km have maximum ticket price of 3.2 million VND/ticket/way.

- Flights with distance from 1,280km or more have maximum ticket price of 3.75 million VND/ticket/way.

The above maximum service price includes all costs that passengers must pay for 1 air ticket, excluding the following fees: value added tax; fees collected on behalf of enterprises providing passenger terminal services and security services including: passenger service fees, passenger and baggage security fees; fees for additional services provided by the airline that passengers have the right to choose to use or not.

Airfare ceiling table proposed by the Ministry of Transport for application in 2019.

Previously, according to calculations by the Civil Aviation Authority of Vietnam in August 2018, due to the increase in Jet A1 fuel prices in Asia and the USD/VND exchange rate, the average cost of a flight increased by about 17% compared to August 2015 (when the Civil Aviation Authority issued Official Dispatch No. 5010/CHK-TC promulgating the ceiling price framework for air tickets, which is currently in effect).

Meanwhile, the maximum declared fares of Vietnamese airlines account for 76% to 99% of the ceiling price. Therefore, from July to August 2018, airlines have proposed to adjust the fares to suit the actual situation.

Jetstar Pacific specifically proposed to increase the maximum rate by 25% compared to the current regulations. Meanwhile, Vietjet Air and Vietnam Airlines proposed to adjust the price appropriately but did not give a specific price.

Currently, the maximum declared price of airlines is 76-79% of the current ceiling price (depending on each route).