Rise in Prices, Businesses Still Suffer Losses
On the morning of March 18, during the questioning session with the Minister of Finance, Ho Duc Phoc, Deputy Phan Thi My Dung (Long An Delegation) requested the Minister to explain why airfares have been increasing recently. What is the solution to make it more convenient for people to travel and promote the strong development of the Vietnamese tourism industry in the future?
In response to this question, Minister of Finance Ho Duc Phoc said, according to the provisions of the Price Law, the Ministry of Transport and Communications will decide on the airfare framework. Companies will sell tickets within that framework. Based on the actual travel needs of the people, the prices of tickets will be determined accordingly.
Deputy Nguyen Quang Huan (Binh Duong Delegation)
According to him, even though airfares have increased recently, the companies are still incurring losses. For instance, Bamboo Airways has cut many routes, while Vietjet is also facing difficulties. As for Vietnam Airlines, the Minister said that the current loss is up to VND 37 trillion and the highest profit in any year only reaches VND 3 trillion, “it is still very difficult”.
Not satisfied with the answer, some deputies continued to debate with the Minister of Finance on this issue. According to Deputy Nguyen Quang Huan (Binh Duong Delegation), it is not always necessary to increase ticket prices as a solution to increase revenue.
“Sometimes when ticket prices decrease, the number of passengers increases, leading to higher revenue. I think businesses need to study this issue,” said Mr. Huan.
Request for Review, Inspection, and Examination
Continuing the discussion, Deputy Trinh Xuan An (Dong Nai) raised the issue of price management for goods such as electricity and air tickets.
According to him, the high increase in airfares does not necessarily stem from fuel issues or supply and demand. Regarding price management, we have the Price Law and a very complete legal framework. However, according to him, there is a paradox that “the higher the prices, the more losses businesses suffer” when it comes to these goods.
Deputy Trinh Xuan An (Dong Nai Delegation)
Deputy An believes that determining the price level requires considering the inputs, outputs, and other costs. For air tickets, the cost issue, especially for Vietnam Airlines, is too high, which directly affects the price and is not about supply and demand or fuel issues.
Regarding electricity prices, deputies from the Dong Nai delegation pointed out that the current situation is that electricity prices only go up but never come down, while EVN is still suffering losses. Is our price calculation not transparent, open, and complete?
In his role as sector management, general management, he suggested that the Ministry of Finance conduct a review, and even inspection and examination to ensure compliance and to protect the interests of businesses while safeguarding the interests of the state and the people.
Explaining further, Minister of Finance Ho Duc Phoc took into account the opinions but continued to affirm that the companies are currently complying with the regulations. The airfare framework issued by the Ministry of Transport and Communications has 15 price levels. They are currently operating within that framework and “have not exceeded the framework.”
Minister of Finance Ho Duc Phoc
According to the Chief of the Financial Sector, some countries have abolished price ceilings for airfares, allowing businesses to decide based on market supply and demand. However, our Price Law still stipulates fare ceilings, which are determined by the Ministry of Transport and Communications, and the companies are currently operating in accordance with the regulations, so they have not violated the law on prices.
The Minister also mentioned that in the past 3-4 years, the COVID-19 pandemic has caused disruptions to air routes, both domestically and internationally. This year, travel demand, both domestic and international, is still limited.
“Previously, we had many Japanese and Russian tourists, but now the situation in Russia is like that, and the value of the Japanese Yen has decreased, so there are fewer tourists,” Mr. Phoc said.
According to the Minister, in order to reduce input costs and restructure the air service system, cost management and reducing costs are issues that private enterprises are most concerned about. As for Vietnam Airlines, the Capital Management Committee and the Ministry of Transport and Communications are also very interested.
“The Ministry of Finance has also made requests to streamline the organizational structure, improve quality, and ensure business efficiency,” said Mr. Phoc.
