The new fare rate for economic class, which includes value-added tax (VAT) and surcharges, may be applied from the Lunar New Year (Tet) festival, which falls in January next year, online VietnamNet quoted deputy general director of Vietnam Airlines Trinh Hong Quang as saying.

Under the new rate, the ceiling for one-way fares for flights of less than 300km will be VND2.5 million (US$119), VND2.55 million for routes between 300km and 850km and VND3 million (US$142.85) for routes between 850-1,000km.

It will be VND3.84 million for routes between 1,000km to 1,280km and VND4.725 million for routes longer than 1,280km. These fares are exclusive of VAT and surcharges.

Air carriers can currently charge VND863,636 for one-way flights of less than 300km, VND1.1 million for routes between 300km and 500km, and VND1.481 million for routes between 500km and 850km.

The ceiling one-way fares are currently VND2.227 million for routes between 1,000km to 1,280km and VND2.727 million for one-way flights longer than 1,280km, exclusive of VAT and surcharges.

Airlines said they are suffering losses with current fare rates. Indochina Airlines has to ground aircraft while others have had to cut flights.