Vietnam Airlines calls for lifting of price cap on domestic air tickets

 Report, photo copyright by : Gan Yung Chyan, KUCINTA SETIA

Vietnam Airlines recently submitted comments on the Vietnam Civil Aviation Law (Draft Amendment), calling for the removal of the airfare cap on domestic routes in Vietnam and suggesting that national airlines be given priority in obtaining take-off and landing slots, according to Vietnam News Agency.

In its latest feedback, Vietnam Airlines said that removing the fare cap would give airlines greater autonomy and flexibility, allowing them to better respond to market changes. Since the covid outbreak, the company has made suggestions on this issue many times, and the voice has become increasingly strong. Before the revision of the law was completed, Vietnam Airlines had suggested temporarily raising the current fare cap, believing that this was a transitional solution that would allow airlines to make price adjustments more effectively on domestic routes.

The Ministry of Construction of Vietnam, which is responsible for drafting the Vietnam Civil Aviation Law, said that domestic passenger air transportation is still considered a basic service and should be included in the scope of national pricing management in accordance with relevant legal provisions. Although Vietnam currently has six airlines operating domestic routes, Vietnam Airlines and Vietjet Air together account for the vast majority of the market share. The Ministry of Construction believes that under this market structure, both price caps and floors must be implemented to prevent the abuse of market dominance.

In addition to the adjustment of fare policy, Vietnam Airlines also hopes to receive preferential treatment in airport time allocation. The company suggested that the revised law should give "national airlines priority in allocating flight slots".

In response, the Ministry of Construction said that it would consider the suggestion during the drafting process and refer to international practices and Vietnam's actual conditions. Any special policies for national airlines in allocating flight slots must be clearly stipulated in the implementation rules of the law. The Ministry of Construction also emphasized that future flight slot allocation policies should aim to improve airport resource utilization and avoid resource waste, especially in the context of Vietnam's plans to expand airport infrastructure.