Vietnam airfares exceed Thailand’s on exchange rate fluctuations

By Anh Minh   May 14, 2024 | 03:09 pm PT
Vietnam airfares exceed Thailand’s on exchange rate fluctuations
Deputy Minister of Transport Nguyen Danh Huy speaking at the Standing Committee of the National Assembly session on May 13, 2024. Photo by the National Assembly Press Center
Airfares are higher than in neighboring Thailand due to exchange rate fluctuations, rising fuel costs and that country’s tourism promotion policies, Deputy Minister of Transport Nguyen Danh Huy said.

Vietnam Airlines' average ticket prices have risen by 14-20% from the end of 2023 to US$0.08-0.12 per kilometer this year, Huy said while speaking at a Standing Committee of the National Assembly session session on Monday.

The U.S. dollar has appreciated by nearly 5% against the Vietnamese dong so far this year, he said.

A 1% increase in the dollar’s value could lead to a VND300 billion (US$12.1 million) annual loss for Vietnam Airlines, according to the carrier.

Fuel costs have nearly doubled from 25% of the fare before Covid to 40% now, it said.

The transport deputy minister said airfares are also high due to an aircraft shortage.

Many airlines have had to ground their A321, the main aircraft used on domestic routes, due to engine issues, prompting them to lease planes, which increases costs, he explained.

Yet Vietnam Airlines’ average domestic fare is lower than in some other countries, he said.

For instance, flights between Shanghai and Guangzhou in China cost $0.27-0.3 per kilometer, he said.

Thailand’s airfares are lower due to the country's recent tourism promotion policies, which have significantly reduced aviation fees.

Recently many Vietnamese have pointed to the fact that on some domestic routes, especially between Hanoi and HCMC, it is cheaper to transit through Thailand.

For instance, in late February Ngoc Son of Hanoi’s Cau Giay District found that a flight from Hanoi to HCMC via Thailand cost VND7.5 million while a direct flight cost more than VND10 million.

Referring to such reports, Huy said prices could increase if tickets are bought too close to the flight time.

"According to research by the Civil Aviation Authority and the General Statistics Office, tickets are cheaper if bought a month or two in advance."

Last quarter Vietnamese airlines transported a total of 13 million passengers, down 5% from a year ago.

Of them only 8.5 million traveled domestically, an 18% year-on-year decrease.

To stabilize fares, the transport ministry wants airlines to monitor costs, increase overnight flights, and use wide-body aircraft if possible.

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