Airfares set to rise as Vietnam hikes airport service fees

By Doan Loan   August 16, 2017 | 04:00 am PT
Airfares set to rise as Vietnam hikes airport service fees
Passengers check in at Noi Bai International Airport in Hanoi. Photo by VnExpress/Minh Nga
Airlines are unlikely to bear the brunt of the additional cost they will have to pay for using the country's airports.

Vietnam’s aviation authorities have decided to raise service fees for all carriers that use the country's airports from October this year, a move that is likely to propel airfares in the same direction.

Accordingly, the cost incurred each time a plane touches down or takes off will rise by 5 percent from the current level, and there are plans to raise it by a further 5 percent from June 2018, the Ministry of Transport said.

In addition, a 15 percent premium will be charged for planes that take off or land during peak hours, while a 15 percent discount will be offered for those that arrive or depart in off-peak periods. 

The price hike aims to help airport operators cover maintenance expenses and fund upgrade work, the Civil Aviation Authority of Vietnam (CAAV) said.

It added that the sharp increase during peak hours will encourage carriers to use the airport at quiet times to avoid overcrowding.

After the initial increase, airlines will have to pay from VND700,000 ($30) to VND5.8 million for all take-offs and landings, depending on the size of the plane.

If airport service fees go up, it is only a matter of time before airfares follow suit, a representative from a local airline told VnExpress.

"We can suffer lower profits in the short term, but in the long term we will have to raise fares," the representative said, declining to be named.

Airports across the country served more than 55 million passengers during the first seven months of this year, figures from the CAAV showed.

Currently, there are 63 foreign airlines from 25 countries and territories operating in Vietnam.

Foreign airlines together with domestic carriers Vietnam Airlines, Vietjet Air and Jetstar Pacific are operating 105 international routes out of Hanoi, Ho Chi Minh City, Da Nang, Nha Trang, Phu Quoc and Hai Phong.

Meanwhile, there are 52 domestic air routes and 22 civilian airports across the country. 

The Airports Corporation of Vietnam plans to transport 91 million passengers and 1.2 million tons of cargo this year, increases of 13 percent and 5 percent respectively.

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