CAAV proposes higher floor price for local flights

Tan Son Nhat International Airport has suspended passenger flights since late July

Accordingly, the authority (CAAV) proposed a floor price equivalent to 20 per cent of the regulated ceiling price on local routes during the 12 months from November 1, 2021 to October 31, 2022.

This measure aims to avoid local airlines running continuous discounts to maximise seat occupancy as the local aviation market has been severely affected by the COVID-19 pandemic.

If the proposal goes through, the floor price would be VND340,000 ($14.80) for routes below 500km; VND440,000 ($19.13) between 500 and 850km, and VND560,000 ($24.35) between 850km and 1,000km.

For routes between 1,000km and 1,280km, the floor price would be VND640,000 ($27.80), and for anything above it would be VND750,000 ($32.60).

These prices would be equal to the basic rates of high-grade railway services (soft seats in air-conditioned carriages) as well as long-haul road transportation.

The CAAV assumed that the move seeks to ensure the interests of consumers, airlines, and the state alike.

It also admitted that this temporary solution could reduce the competitiveness of local aviation businesses as consumers might prefer more reputable foreign airlines if prices are the same.

Earlier, on August 30, CAAV had asked Vietnam Airlines, Vietjet Air, Bamboo Airways, Pacific Airlines, and Vietravel Airlines to suspend selling air tickets for domestic routes. A CAAV representative said the order was made to ensure safety amid the COVID-19 pandemic. The airlines were directed to refund passengers whose flights would have taken off after July 21.

CAAV also requested airlines to reduce the number of flights from/to cities and provinces practising social distancing.

Airlines must report plans to operate safe flights to CAAV for consideration and approval.