Vietnam retains current price ceilings on domestic flights

The current price ceiling, fixed by the Transport Ministry in August 2015, is set to remain unchanged for the time being as a new draft circular on air transportation rates.

Under the draft circular on air transportation prices, prices for five different classifications range from VND1.6 million ($68) to VND3.75 million ($160) per one-way ticket.

The lowest ceiling applies to flights for distances of 500 kilometers and less to remote rural areas, islands and mountainous areas that require a socioeconomic development boost.

The highest price ceiling of VND3.75 million ($160) applies for flights of more than 1,280 kilometers.

The maximum service charges listed above are for economy seats, not including value added tax and other charges like baggage, service and security fees.

In July, several carriers had suggested that the price ceilings be raised since fuel prices were higher than when the current ceilings were introduced in 2015.

But the Civil Aviation Administration of Vietnam (CAAV) advised that current price levels be maintained to follow the government’s directive on curbing inflation.

As of now, the ticket prices listed by carriers are 76-79 percent of the ceiling.

The CAAV acknowledged that the ceiling prices need to be adjusted, especially for long flights, adding that it will re-assess the situation next year and propose new price brackets if needed.

Vietnam's aviation industry has been booming in recent years. The country served more than 94 million air passengers in 2017, up 16 percent from the previous year, including 13 million foreigners.