Domestic aviation prices to fall 4% next month

Thursday, Sep 17, 2015 10:03

Passengers board a Vietnam Airlines plane. The cost for domestic air travel wil be cut by an average 4 per cent as of October 1. — Photo
HA NOI  (Biz Hub) — The cost for domestic air travel will be cut by an average 4 per cent as of October 1 following recent declines in fuel prices.

According to Civil Aviation Authority of Viet Nam (CAA) dispatch No5010/CHK-TC, the reduction is based on the authority's calculation of Jet A1 petrol price decreases, which fell 4.71 per cent in December last year, along with fluctuating exchange rates.

Meanwhile, ceiling prices for economy class tickets will be adjusted, depending on flight distances, standing at about VND1.6 million (US$70) for a one-way ticket for the shortest distance of 500 kilometres or under, and some VND3.75 million ($165) for a one-way ticket of 1,280 kilometres and above.

The CAA also asked airlines to ensure that their ticket fares and additional fees do not exceed ceiling prices. Aviation companies were further requested to continue offering low prices and applying various promotions, in accordance with earlier instructions from the CAA.

During a recent meeting held in HCM City by the Viet Nam Standards and Consumers Association (VINASTAS), vice chairman and general secretary of the Viet Nam Pricing Evaluation Association Nguyen Tien Thoa has also called on authorities to fine transport enterprises that have delayed cuts in fares despite multiple rounds of fuel price cuts.

Viet Nam's taxi fares were the highest in Southeast Asia, Thoa said.

Calling the situation "unacceptable", Thoa said that petrol and diesel prices had fallen by VND3,380 and VND2,760 per litre, respectively, between July 4 and September 3.

Compared to fuel prices before July 4, petrol slid a total of 16.3 per cent and diesel 17. 2 per cent.

He said that transport fares should be lowered by 4.1-5.7 per cent because other factors such as salaries had not risen in the past two months.

Thoa said that fuel costs made up 25-35 per cent of costs for gasoline-fueled vehicles.

For instance, taxi fares were VND11,000-12,000 per kilometre in Ha Noi and VND14,500-15,500 in HCM City. They should be reduced by VND448-685 and VND591-884 per kilometer, respectively, Thoa said.

Because diesel costs accounted for 35-45 per cent of operational costs, a price reduction of 6-7.75 per cent would be feasible, he added.

If current transport charges are about VND550 per kilometre, they could be cut by VND33.17-42.64 per kilometre.

A trip of 150 kilometres would then cost VND82,500, a reduction of VND4,975-6,397 per kilometre.

Thoa said that taxi fares in Viet Nam were much higher than in regional countries.

The average fares in Bangkok, Manila, Jakarta and Singapore are VND3,800, VND5,700, VND6,300 and VND8,700 per kilometre, respectively. Ha Noi's taxi fares of VND11,000 to VND13,900 per kilometre are 26.4-60 per cent higher, and HCM City's taxi fares are VND14,500-15,000 per kilometre, 66.7-78.2 per cent higher than the regional average.

Thoa said fines on transport enterprises had not been effective in lowering charges. Consumers should also protect their interests by asking for fee adjustments when signing contracts with transport firms.

Authorities should also publicise the names of enterprises that have lowered transport fares, Thoa said.

Nguyen Manh Hung, VINASTAS's vice chairman and general secretary, said that taxi firms often cited a costly metre re-installation as an excuse for delayed fare adjustments.

Taxi firms have never clarified how complicated and costly it was to adjust metres.

Hung called for State agencies to look into transport firms and take punitive sanctions against violators to ensure fair treatment of consumers. Only two taxi firms in HCM City have decreased fares.

Thuong Thanh Hai, deputy director of the Eastern Bus Station, said 12 out of 214 transport firms had registered to lower fees by 4-10 per cent.

For container trucks in HCM City, no firms had registered to cut transport fees. The transport fee for Cat Lai Port to Thu Duc's Linh Trung Export Processing Zone route is now VND2.65 million.

But the transport firm's fare, based on current costs of petrol, could be adjusted down by VND144,000. — VNS

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