Aviation Authority proposes to increase peak hour service prices

The Civil Aviation Authority proposed that group A and B airports, including Tan Son Nhat and Noi Bai, will increase service prices by 15% compared to current levels.

That is one of the important contents in the document sent to the Ministry of Transport on the construction of prices and price frames for some aviation services of the Civil Aviation Authority.

No effect on ticket price

In addition, the new peak hour price will increase by 15% and decrease by 15% during off-peak hours.

Peak hours are considered to be hours with actual flights of 90% or more compared to the airport's operating limit. Off-peak hours are considered to be hours with actual flights of 0 - 30% compared to the airport's operating limit. Normal hours are operating hours excluding peak and off-peak hours.

In this proposal, for Group A and B airports, the Civil Aviation Authority proposes that during normal hours, the service price will be increased by 15% compared to the current level. This price will be increased by 15% during peak hours and decreased by 15% during off-peak hours. Group C airports will apply a price equal to 60% of the prescribed price for Group B airports during peak hours.

The increase in peak hour flight service prices is intended for airlines to adjust flights accordingly.

To avoid affecting the business operations of airlines, the price adjustment roadmap applied from July 1 is a 5% increase. Then, from January 1, 2018, it will continue to increase by another 10% compared to the current price.

Thus, during peak hours, the take-off and landing price applied from July 1 for ATR 70 aircraft is 698 thousand VND/time, A320, A321 aircraft is more than 1.5 million VND/time, A350, B787, B777, A330 aircraft is about more than 5.8 million VND/time.

According to the leader of the Civil Aviation Authority, the price of aircraft take-off and landing services for domestic flights has been maintained stable since 2011. Compared to the average of the ASEAN region, the flight price in Vietnam is quite low, only 47 - 67% of the countries in the region.

According to the explanation of Mr. Lai Xuan Thanh, Director of the Civil Aviation Authority of Vietnam, the proposal to develop a policy on take-off and landing prices for domestic flights according to time frames aims to influence domestic airlines to adjust flight times, ensuring that they are consistent with the operating capacity of airports. In fact, the current overload during peak hours at some airports is mainly due to the output and growth rate of domestic flights.

The price of aircraft take-off and landing services for domestic flights has been stable for 5 years (from 2011 to present). Meanwhile, compared to the average in the ASEAN region, the price of aircraft take-off and landing services for domestic flights in Vietnam is quite low, only 47 - 67% depending on the type of aircraft.

In a related development, General Director of Airports Corporation of Vietnam (ACV) Le Manh Hung also said that to ensure revenue from take-off and landing services for domestic flights, the price of this service needs to be adjusted up to 225% compared to the current price. And to be able to make a profit of 10%, this number needs to be adjusted up to 258%.

Along with that, according to ACV's calculations, if the proposal is approved by the Ministry of Transport, airlines are expected to have to increase spending by more than 143 billion VND/year, equivalent to 5,100 VND per passenger (accounting for 0.1% of airfare).

“This small ratio is not enough for airlines to have a reason to increase airfares,” said an ACV representative.

Many other services also increased fees

In addition, the prices of some other services will also be adjusted up, such as aviation security services will increase from 1.5 USD to 2 USD per passenger for international routes, and from 9,000 VND to 18,000 VND per passenger on domestic routes.

However, Mr. Lai Xuan Thanh explained: “In fact, the passenger and baggage security service collected by ACV from passengers is not simply passenger and baggage security screening, but also includes many other services such as: aircraft security, security for delayed and missed passengers, management and monitoring of passengers denied entry within 24 hours, passenger identification, etc.

Regarding the current aviation security service price, ACV said that Vietnam's current fee is lower than that of the ASEAN region. Specifically, Singapore is charging 6 USD/passenger, Myanmar 6.5 USD/passenger, Cambodia 3 USD/passenger and China 2 USD/passenger (both domestic and international).

In order to improve the capacity to ensure aviation security and safety, the Civil Aviation Authority finds it appropriate to increase the price of security services.

According to Baodatviet