Starting from March 1st, Decree No. 34/2023 (amending and supplementing Decree No. 17/2019 of the Ministry of Transport on the fare framework for domestic passenger transport services) will officially take effect. Accordingly, the ceiling price of domestic air tickets will be adjusted to increase by about 3.75% compared to the current price.
Mr. Le Hong Ha, General Director of Vietnam Airlines, said that this adjustment of the ceiling price of domestic air tickets is the first adjustment in nearly 10 years. Many input costs in the aviation industry have changed during that time, especially fuel prices, exchange rate factors – the aviation industry mostly uses USD in its cost structure.
“Adjusting the ceiling price of domestic air tickets from March 1st is a condition for airlines to offset the costs that have changed over the past 10 years. This is also an opportunity for airlines to continue adjusting their ticket prices on the domestic flight system” – Mr. Ha said.
Domestic tourism is affected when airfares rise
According to Mr. Le Hong Ha, the aviation industry only has the peak periods of Tet and summer as compensation for other low seasons.
Meanwhile, in the exchange with a reporter from Người Lao Động Newspaper on February 29th, many travel companies expressed concerns when the ceiling price of air tickets increased, especially in the context that airfares after Tet are still very high.
Mr. Nguyen Minh Man, Director of Communications and Marketing – TSTtourist Company, said that adjusting the ceiling price of air tickets from March 1st will have an immediate impact on domestic tours. Therefore, tour prices must be adjusted accordingly. In 2024, the tourism industry will be greatly affected by aviation, including engine maintenance, route reduction, and price increase…
“Tourists are the ultimate consumers, they will make decisions to choose the appropriate form of tourism to meet their needs. However, based on assessment, the adjustment of air ticket prices is acceptable” – Mr. Man commented.
Domestic tourism has always been less competitive compared to international tourism, and it is now predicted to become even more difficult as airfares increase. Mr. Pham Quy Huy, Director of Kiwi Travel Company, is concerned that domestic tourism by air this year will be difficult. At the moment, although it has not entered the peak summer season, airfares are already high. Many customers with travel plans are prioritizing nearby tours or traveling by road.
“Customer demand is also shifting towards international tours as airfares become more competitive. For example, the route from Ho Chi Minh City to Hanoi, Phu Quoc, Nha Trang… in March 2024 is still high, such as the round-trip ticket from Ho Chi Minh City to Hanoi is about 4.5 – 6 million VND/person while the tour price ranges from 3.5 – 4 million VND/person for a 4-day itinerary. The total cost of the tour, including air tickets, is from 7-10 million VND/person. With this price level, tourists will choose to travel abroad to destinations such as Thailand or Singapore” – Mr. Huy worried.
Some travel companies predict that for domestic tourism, the possibility of choosing nearby destinations and self-guided tours will increase. If the Ho Chi Minh City market is the focus, Vung Tau, Ho Tram, Phan Thiet, Phan Rang, and even Nha Trang will be the choices of tourists. Among them, transportation by car will increase due to the time advantage of the expressway.
