Aviation authority proposes removal of airfares’ ceiling rates

The Civil Aviation Authority of Vietnam (CAAV) has recently proposed the removal of the cap for airfares on domestic routes operated by at least three carriers.

It made the request in a draft report reviewing the implementation of the 2006 Law on Civil Aviation of Vietnam and the revised edition in 2014. 

In such domestic air routes, carriers will be able to set their prices. 

At present, the ceiling rates of domestic air tickets are decided based on distance in accordance with State regulations. 

The basic economy fares, applied since 2015 for five groups of air routes, stand between VND1.6 million and VND3.75 million  (US$70 - US$163), depending on distance and excluding additional costs.  

The application of the ceiling rates is believed to restrict quality improvement, the CAAV explained. 

Echoing its views, experts noted that the removal of the caps will help airlines become more flexible in adjusting airfares during peak time and maximise their revenues.

Vietnam is now home to six domestic airlines of national flag carrier Vietnam Airlines, Pacific Airlines, Vasco, Vietjet Air, Bamboo Airways and Vietravel Airlines.

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