Foreigners say fare reforms just the ticket

The new one-price system represents a reduction of VND275,000 ($17.50) for foreigners but a jump of VND125,000 ($8) for locals flying between the two commercial hubs compared to the present pricing system. Airfares for other routes have been also fixed.
Christian Saillard, commercial and economic counsellor at the French Embassy, welcomed the decision, saying the single price system was something foreigners had wanted the Vietnamese government to do for many years.
“It is a big improvement. It is not only me – many foreign investors and donors have praised this,” he said.
Saillard said he flew from Hanoi to Ho Chi Minh City often and he was unhappy about the dual prices but not for financial reasons.
The impact of the dual fare was psychological, he said, because it made foreigners feel they were not being treated equally. “The single price system will create a level playing field [between Vietnamese and foreigners],” he said.
The airfare harmonisation mirrors the government’s determination to abolish the dual system in order to improve the investment environment. It follows a decision to abolish dual pricing for train tickets between Hanoi and Ho Chi Minh City in 2002.
Foreign investors have said abolishing dual pricing system was of paramount importance to eliminate the discrimination between foreigners and Vietnamese.
Deputy head of Civil Aviation Authorities of Vietnam, Pham Vu Hien, said the move was the final step in a three-year road map to gradually eliminate the difference in all domestic passenger air fares between Vietnamese and foreigners.
Hien said the implementation of the plan meets the demands of integration, investment promotion and tourist encouragement that were recommended by international economic and aviation organisations.
“The airfare harmonization will eliminate the thinking of being discriminated among passengers and gradually improve the image and prestige of air carriers,” he said.
The authorities said the increase in airfare for Vietnamese would not have much impact on the volume of air travel between the two cities. This was demonstrated by the fact that the number of Vietnamese passengers travelling the route was on the rise despite a price increase a few years ago.
The plan has been jointly implemented by the Civil Aviation Administration of Vietnam and the Government Pricing Committee since 2001.
The abolition of the dual price system has been a contentious issue for the aviation, power and advertising industries who have all argued that foreigners should be charged more than locals as they earn higher income.
Foreigners are still charged more for electricity and advertising.