Ministry of Transport explains why it has not yet removed the ceiling price for air tickets

Accordingly, the Ministry of Transport proposed to keep the draft Law on Prices unchanged: " Passenger transport services on domestic flights: The Ministry of Transport decides the maximum price, the airline decides the specific price ."

The Ministry of Transport believes that air transport is one of the services that has a very large impact on people's lives and production and business activities.

Not regulating price ceilings means that the State has abandoned its regulatory tools and left businesses with full authority to decide on service prices. Airlines can completely set high ticket prices, especially on routes with limited competition or during peak periods, which will affect consumer rights.

Furthermore, domestic passenger transport services are still one of the services with limited market competition and are subject to the criteria set by the State for pricing as prescribed in Point d, Clause 1, Article 21 of the draft Law on Prices.

Currently, there are only 5 airlines participating in the market, but the domestic air transport market share still has businesses with over 30% market share - dominating the market.

In the long term, the Ministry of Transport believes that when the supply capacity of air transport better meets social demands; the aviation market has the diverse participation of many Vietnamese airlines, promoting real competition in ticket prices, service quality, passengers have the right to choose according to their needs and capabilities, then the proposal to remove the price frame for passenger transport services on domestic flights is appropriate.

"The State will manage domestic aviation service prices according to the market's self-regulating mechanism and control airlines' selling prices according to the provisions of the Competition Law," the Ministry of Transport emphasized.

According to the Ministry of Transport, the gradual removal of regulations on passenger transport service prices on domestic flights needs a roadmap and in the immediate future, to respect and ensure the right to set prices of enterprises, the draft Law on Prices has been promptly completed in the direction of shifting from price framework regulations to maximum price regulations to create a mechanism to encourage healthy competition to reduce service prices and protect consumer interests.

The Ministry of Transport is seeking opinions on amending a number of articles of Circular No. 17/2019 on the price framework for passenger transport services on domestic flights.
According to the Draft Circular, for flights under 500 km, the transportation service price remains the same as Circular 17. Specifically, the group of flights for socio-economic development still has a maximum price of 1.6 million VND/one-way ticket. The group of other flights under 500 km has a maximum price of 1.7 million VND/one-way ticket.
For flights from 500 km to under 850 km, the maximum suggested price is 2.25 million VND/one-way ticket. While according to current regulations, this figure is 2.2 million VND/ticket.
For flights from 850 km to under 1,000 km, the maximum suggested price is 2.89 million VND/ticket, 100,000 VND higher than current regulations.
For flight distances from 1,000 km to less than 1,280 km, the new Draft proposes a maximum price of VND3.4 million, VND200,000 higher than current regulations.
Finally, the proposed price of VND4 million is for flight distances of 1,280 km or more. This figure is VND250,000 higher than the current regulation.

Thanh Lam

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