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Domestic airfare cap may surge up to $170

The Transport Ministry is planning to increase ceiling airfare for domestic routes to VND4 million ($170).

Domestic airfare cap may surge up to $170

Under a new circular drafted by the ministry, for routes from 500 km to less than 850 km, the ceiling airfare rise by VND50,000 to VND2.25 million for an economy-class one-way ticket; from 850 km to less than 1,000 km, by VND100,000 to VND2.89 million; from 1,000 km to less than 1,280 km, by VND200,000 to VND3.4 million; and from 1,280 km or more, by VND250,000 to VND4 million.

Ceiling airfares for routes under 500 km remain VND1.6-1.7 million.

On June 5, the Vietnam Aviation Business Association proposed removing domestic airfare caps.

According to aviation experts, airfare caps are only appropriate when a private aviation market has not been formed. But now, Vietnam has six airlines competing with each other.

According to the Civil Aviation Authority of Vietnam, the current domestic airfare caps are stipulated in 2015 when the price of Jet A1 fuel was around $60 a barrel.

In 2022, when the jet fuel’s price surpassed $150 a barrel, airlines proposed hiking the caps.

Airfare caps are placed only on domestic routes, not on international ones.

Vietnam served 54.2 million air passengers last year, up 3.7 times against 2021, according to the Civil Aviation Authority of Vietnam.

Specifically, the number of domestic air passengers rose 3.5 times to 43.2 million, and that of foreign ones surged 22-fold to 11 million.

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