Why do airfares surge?

By Anh Tu   May 9, 2024 | 11:00 pm PT
Why do airfares surge?
Passengers leave an aircraft at Noi Bai International Airport in Hanoi. Photo by VnExpress/Giang Huy
Airfares in Vietnam have risen in double-digits year-on-year, driven by a shortage of aircraft.

On the Hanoi-Ho Chi Minh City route, which has among the highest demand anywhere in the world, Vietnam Airlines charges VND2.64 million ($104) for a one-way ticket, up 14% from a year ago.

It is 11% up on Bamboo Airways at VND2 million, 24% up on Vietjet at VND1.74 million and 15% up on Vietravel Airlines at VND1.5 million.

Ticket prices comprise fare, system management fee, airport fee, payment fee and value-added tax.

Why do airfares surge?

VnExpress has found that the fares are up sharply.

On the Hanoi-HCMC route, Vietnam Airlines now collects VND2.32 million per ticket for itself, a 15% increase from a year ago.

The fees that it collects for the Airports Corporation of Vietnam (ACV) are up 9% at VND321,000.

Why do airfares surge? - 1

On the Da Nang City routes from Hanoi and HCMC, Vietjet collects VND1.27 million as fare, up nearly 43% from last year.

It collects VND195,000 for the ACV and the government, up 17%.

On the same routes, Bamboo Airways collects VND1.36 million for itself, up 32%, and VND206,000 for the ACV and the government, up 14%.

Why do airfares surge? - 2

The Civil Aviation Authority of Vietnam (CAAV) blamed the rise in airfares on an aircraft shortage.

Domestic airlines are now operating 165-170 jets, down 40-45 from last year. The entire industry now mostly relies on the two biggest carriers, Vietnam Airlines and Vietjet.

Pacific Airlines has not resumed operations after its aircraft had to be returned to lessors. Bamboo Airways has a fleet of five aircraft, while Vietravel Airlines has three.

The shortage of jets would keep fares high during summer when travel demand peaks, the CAAV said.

Globally too airfares are expected to rise after a period when airlines offered discounts to attract customers, according to the Association of Asia Pacific Airlines.

go to top