Airfares in Vietnam expected to drop with new pricing rule

By Mai Ha, Thanh Nien News

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The price ceilings for domestic air tickets will be cut by 4 percent next month. Photo: VNA The price ceilings for domestic air tickets will be cut by 4 percent next month. Photo: VNA

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Vietnam’s aviation authorities have reduced the price ceilings for domestic air tickets by 4 percent from next month in response to recent falls in fuel costs.
A statement from the Civil Aviation Administration of Vietnam said it has taken into consideration both fuel cost declines and higher operating expenses due to a weaker dong. 
Under the new rule, airfare for a flight shorter than 500 kilometers cannot cost more than VND1.7 million (US$77). These include services from Ho Chi Minh City to Phu Quoc or Nha Trang. 
Economy flights from Hanoi or HCMC to Hue or Da Nang will be capped at VND2.2 million ($99), while tickets from Hanoi to HCMC are not allowed to exceed VND3.2 million ($140). 
The longest flight between Hanoi and Phu Quoc will not cost more than VND3.75 million ($165). 
With the new price ceilings, airfares are expected to fall. Prices of some domestic rules are already lower than the new caps. 
The Finance Ministry cut airfare ceilings by 15 percent early this year after global prices plummeted. 
Fuel makes up nearly 40 percent of operating costs of local airlines.

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