Vietnam's flagship carrier lowered its cap to VND1.7 million (US$79.5) on short-haul economy-class fares on Monday, a slight reduction compared to 2014.
The maximum economy-class fare for flights to remote areas and islands was cut to VND1.6 million ($74.9).
The reduction will affect the following routes: Hanoi – Na San (in the northern mountainous province of Son La), Ho Chi Minh City – Can Tho/Ca Mau/Con Dao, Vung Tau – Con Dao, Can Tho – Con Dao, Da Nang – Vinh/Pleiku/Quy Nhon/Dong Hoi.
Starting January 15, passengers who are residents or workers residing in remote areas -- including the island of Con Dao, the southern province of Ca Mau and the highland town of Pleiku -- will benefit from 15 percent to 30 percent discounts.
The effort began late last year, when the Civil Aviation Authority of Vietnam (CAAV) asked the Ministry of Transportation to push fares on certain domestic Vietnam Airlines flights below the cap amid falling global oil prices.
On December 19, the Ministry of Finance approved the CAAV's proposal to lower the cap on domestic economy-class fares that cover less than 500 kilometers by 15 percent in 2015.
The CAAV had found that several short-haul tickets were prohibitively expensive for the airline's target customers.
The 2011 fare caps for flights between 500 and 1,280 kilometers set the prices between VND2.25 million and VND4 million.
Most carriers charge between 70 and 84 percent of the cap, according to the CAAV.
“The fare reductions will take several factors into consideration, such as the number of customers, to make sure the carriers continue to profit and the customers benefit from the reductions in the price of oil,” a CAAV official told news website VnExpress.