Aircraft at Tan Son Nhat International Airport in Ho Chi Minh City, February 2021. Photo by Shutterstock/Quang Nguyen Vinh.
The Civil Aviation Authority of Vietnam (CAAV) has proposed removal of the price cap for flight routes with three or more airlines operating.
“Ceiling prices will limit airlines from improving flight service quality. This will affect the airlines’ ability to compete on quality of service, an important factor in sustainable development,” CAAV, stated in a report submitted to the Ministry of Transport.
The majority of domestic flight routes have three or more airlines operating.
Currently, air tickets on routes under 500 kilometers have a maximum price of VND1.6 million ($69), while the highest ceiling is VND3.75 million for routes of 1,280 kilometers or above.
National flag carrier Vietnam Airlines once proposed in 2019 that Vietnam abolish the domestic price ceiling. Vietnam is one of the few countries in the world still employing a price cap.
Local carriers served 11.7 million passengers in the first four months, up 9.5 percent year-on-year, according to the General Statistics Office.