Specifically, the Transportation Service Price Framework for economy class passengers has been revised. For routes with a distance of less than 500 km, the ceiling price is VND 1,600,000 per one-way ticket for economic and social development routes, and VND 1,700,000 per one-way ticket for other routes. The remaining route groups will have price increases ranging from VND 50,000 to VND 250,000 per one-way ticket compared to the previous regulations, depending on the length of each route.
The ceiling price of domestic airfare will increase from March 1, 2024.
For routes from 500 km up to less than 850 km, the ceiling price is VND 2,250,000 per one-way ticket (previously VND 2,200,000 per one-way ticket); for routes with a distance from 850 km up to less than 1,000 km, the maximum ticket price is VND 2,890,000 per one-way ticket (previously VND 2,790,000 per one-way ticket); for routes from 1,000 km up to less than 1,280 km, the ceiling price is VND 3,400,000 per one-way ticket (previously VND 3,200,000 per one-way ticket); and for routes with a distance of 1,280 km or more, the price is VND 4,000,000 per one-way ticket (previously VND 3,750,000 per one-way ticket).
The maximum price includes all passenger costs for an airline ticket, excluding value-added tax and the collection of fees for airports (including passenger service fees and passenger security fees, baggage; additional service fees).
According to the review by the Civil Aviation Authority of Vietnam (Ministry of Transport), the proposed increase in domestic airfare is due to changes in the factors that form ticket prices, especially the increase in fuel prices and exchange rates. According to the suggestions of Vietnam Airlines, Vietjet, Pacific Airlines, and Bamboo Airways regarding the increase in domestic airfares, the cost of aviation fuel accounts for about 36% of transportation costs. The average aviation fuel price in 2022 compared to 2015 (the time when the current ceiling price was applied) has increased by about 85% from $67.3 per barrel to $124.4 per barrel, resulting in a 30.5% increase in aviation costs.
In addition, over 70% of aviation transportation costs are in foreign currencies, while ticket sales revenue in Vietnam is in VND. The exchange rate has increased by 6.6% from 2015 to 2022 (increasing from an average of VND 21,900/USD to VND 23,350/USD), resulting in a corresponding 4.3% increase in aviation costs. Therefore, the average passenger transportation cost in 2022 is VND 2,769 per passenger per km, which is 43% higher than the cost in 2015 (VND 1,933 per passenger per km).
