Ministry of Transport gives reasons for not removing ceiling prices for air tickets

The Ministry of Transport has just issued a document responding to the Vietnam Air Transport Association (VABA) regarding the proposal to remove the price ceiling regulation for air transport services.

The Ministry of Transport said that during the process of giving comments on the draft Law on Prices (amended), the Ministry sent documents to the Ministry of Finance regarding the prices of passenger transport services on domestic flights. Accordingly, it is proposed to keep the draft unchanged, in which the Ministry decides the maximum price, and airlines decide the specific prices for domestic flights.

*The Ministry of Transport believes that removing the ceiling price for air tickets will affect consumer rights (Photo: NIA)*

According to the Ministry of Transport, air transport services are one of the services that have a great impact on people's lives and production and business activities. Not regulating ceiling prices means that the State has abandoned the regulatory tool and left service providers with full authority to decide the price of the service.

When there is no longer a price ceiling, airlines can completely offer high ticket prices, especially on some 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 still 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 (amended).

Currently, there are only 5 airlines participating in the market, the domestic air transport market share still has businesses with a market share of over 30% - 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 diverse participation of many airlines, and passengers have the right to choose according to their needs and capabilities, then the proposal to remove the ceiling price frame for air tickets on domestic routes is appropriate.

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

Furthermore, on June 19, the National Assembly also voted to pass the Law on Prices, which stipulates a ceiling price for domestic air passenger transport services.

Source