Vietnam domestic flights to cost more

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The Ministry of Transport has suggested higher prices for domestic fights in 2010 in an effort to support the carriers.

In a note sent to the Ministry of Finance on Wednesday, the Transport Ministry proposed prices of US$37 for fights shorter than 300 km, $46.75 for flights from 300 km to under 500 km, $64 for flights from 500 km to under 850 km, and $98.41 for flights from 850 km.

The prices do not include value added tax which is 10 percent at Vietnam Airlines and the low-cost Jetstar Pacific Airlines, up from the 5 percent in 2009.

Passengers will also pay the airport fees of VND30,000 if they take off from Noi Bai and Tan Son Nhat Airports, VND25,000 from Hai Phong, Vinh and Da Nang Airports, and VND20,000 from smaller ones, the note said.

If approved by the Finance Ministry, the higher prices for air tickets will take effect March 1, after around two years economy flights have been priced $92 at most.

But the approval is only a matter of procedure as the Finance Ministry on December 30 asked the Transport Ministry to set new price frames for domestic transport following requests by airline companies.

The carriers have said the new caps will enable more flexibility, allowing them to raise prices during the peak flying season or on popular flights, and cut prices on flights that have fewer customers.

According to the note, the government will set the prices of economy tickets for routes that only one carrier has invested in and the latter can ask for adjustments if conditions warrant.

Where more than one carrier operates a route, the carriers can set prices by themselves.

Source: TBKTSG

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