Tight control over airfare pricing required: MoT

Monday, Sep 30, 2024 08:25

Aircraft owned by Vietnam Airlines and Vietjet Air, the two largest domestic carriers, at Hà Nội's Nội Bài International Airport. — VNA/VNS Photo

The Ministry of Transport (MoT) has recently requested specialised State management agencies to closely monitor airfare prices and review the pricing structure of tickets offered by airlines.

The aim is to ensure a balance between consumer interests and airline profitability, as well as to promptly detect and strictly address any violations of pricing regulations.

MoT has also tasked relevant agencies and units with reporting on their progress and submitting these reports to the Civil Aviation Authority of Việt Nam (CAAV) by October 7.

CAAV will compile the reports and submit them to the ministry by October 21, in preparation for a report to the Government and the National Assembly Standing Committee.

According to the ministry, since the beginning of 2024, the average price of economy-class air tickets (inclusive of taxes and fees) on certain routes operated by Vietnamese airlines has increased compared to the same period in 2023.

Ticket sales audits revealed that Vietnamese airlines are selling tickets within the price framework for domestic passenger transport services as stipulated by regulations.

The rise in airfare prices follows global trends, largely driven by market supply-demand factors (such as a reduction in the number of operational aircraft and increased travel demand during holidays and Tết) and fluctuations in fuel prices and exchange rates.

Given the current situation and future forecasts, MoT will continue to implement synchronised and effective measures to help alleviate the pressure on airfare prices.

These measures aim to stabilise the air transport fleet to balance supply and demand across domestic and international routes, meeting the air travel needs of passengers.

Key solutions include enabling airlines to lease additional aircraft, adjusting aircraft operational hours, optimising aircraft utilisation during the day, and increasing night flights. These measures have helped compensate for the capacity shortage caused by the reduced number of operational aircraft.

Additionally, the ministry will continue to strengthen the implementation of measures related to price declarations, price listings, and the public disclosure of pricing information, in accordance with legal regulations. Passengers are also encouraged to plan and book their tickets early to have more options and access better prices.

Earlier, the ministry issued a document requiring airlines to strictly comply with regulations on domestic air passenger transport service pricing. Airlines must declare prices and disclose pricing information and promotional programmes as required.

According to CAAV’s report based on data from Vietnam Airlines and Vietjet Air, the two largest domestic carriers, the cost structure for a single flight in 2023 for these airlines is as follows: fuel costs account for 37 to 42 per cent; equipment, aircraft maintenance and repair costs make up 32 to 41 per cent; flight service costs, including ground services and flight operations, constitute 6 to 7 per cent; and the remaining costs, including direct labour, sales expenses, management and passenger services, account for 16 to 19 per cent. — VNS

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