Vietnam may remove fare caps

July 09, 2016 GoAsiaDayTrip 0 Comments

HANOI, 4 July 2016: Vietnam says it will consider removing the maximum price limit on air ticket for domestic flights.
Thanh Nien News quoted Civil Aviation Authority of Vietnam chief, Lai Xuan Thanh, saying the airline market has become very competitive with multiple players and it is time for the government to allow market forces to control fare levels.
The fare ceiling was introduced to protect passengers, he said, without giving any timeframe for its removal. 
The agency will continue to keep a close watch on air ticket prices and would only intervene if airlines collude to increase prices in a manner that disadvantaged passengers, the chief added.
A one-way economy ticket for a domestic flight cannot cost more than USD165. The government adjusted the cap down 4% last September in response to falling fuel costs, the report said.
State-controlled Airports Corporation of Vietnam, which manages 22 airports around the country, reportedly will seek the Ministry of Transport’s permission to increase service fees for domestic flights such as runway and passenger surcharges.
The corporation expects the additional revenues would help to upgrade airports over the next two years to the tune of around USD1.16 billion.
Details about the possible fee hikes have not been disclosed, the report said.
Vietnam’s airline market should increase 19% to 45 million passengers this year, with the domestic sector accounting for more than 58%.