The skyrocketing price of domestic airfares in recent times has caused frustration for many air travelers and for some tourist destinations.
Many people who planned to travel by plane have switched to traveling by road and tourist destinations have also complained about a decrease in visitors due to high airfares.
Airport suddenly deserted
Not only during peak season, domestic airfares are also very high, even higher than international airfares. For example, the Hanoi - Phu Quoc flight costs up to 7 - 9 million VND, equivalent to a 5-day, 4-night package tour in Thailand.
A survey of ticket prices on airlines' websites from early March to late April 2024 showed that many domestic flights had prices adjusted continuously, with peak prices on April 30 being 1.5 times higher than normal days.
For example, for the Hanoi - Quy Nhon route, the round-trip airfare from April 27 to 30 is 5 million VND, 600,000 VND higher than a month before the peak and 2 million VND higher than a week after the peak.
Hanoi - Phu Quoc route, round trip economy fare is up to 7 - 8 million VND, some trips up to 12 million VND, 2 - 3 million VND higher than normal days.
The high price of air tickets has had an immediate impact on the number of tourists during the recent holidays.
Contrary to expectations of a crowded airport during the April 30 holiday, Tan Son Nhat airport was surprisingly empty. Tan Son Nhat has recorded a decrease in domestic visitors during the six peak days of the holiday, while international visitors increased.
During the six holidays, the total number of flights performed was 3,961; an average of 660 flights/day, down 8.8% compared to 2023 and down 10% compared to 2019 (before the COVID pandemic).
The total number of passengers arriving and departing from Tan Son Nhat Airport was 652,831 during the peak period of the April 30 holiday; an average of more than 108,000 passengers/day, down 7.6% over the same period last year and down 9.6% over 2019.
High airfares hamper tourism recovery
As soon as the number of visitors during the April 30 and May 1 holidays in many localities "evaporated" compared to last year, all attention was focused on two reasons: high airfares and hot weather.
With hot weather, many people say "it's sunny everywhere", the price of airfare is the reason for adjusting tourists' travel behavior.
A marketing director of a company said that as soon as there was information about the ceiling price increase for airfares from March 1, many tourists came to the company only to ask for advice on foreign tours or land tours. Even if they were advised to choose early morning or late flight tickets, tourists still thought the price was still high.
"With the current situation, we are building a price plan for the upcoming summer tour with ticket prices expected to increase even higher," he said.
According to this person, in reality, airfares are hindering the recovery of tourism in many destinations such as Con Dao and Phu Quoc. Reviewing or inspecting is only an administrative measure of the management agency, ticket prices also depend on the supply capacity of the airline, price policy, etc.
Ms. Pham Phuong Anh, General Director of Vietnam Tourism, said that a survey of businesses during the recent holiday showed that tourists were worried about finances, which was clearly shown in booking services for trips. Although the demand for tourists during the holiday increased, the number of air tours using series tickets, or pre-booked tickets, did not increase.
On the contrary, the number of tours by car has increased significantly. For example, this business has nearly 600 more customers, including family groups, businesses... and focuses on tours to Nha Trang, Can Tho, Da Lat, Quy Nhon, Ta Dung Lake...
Mr. Phuoc Dang, from Outbox Company, a travel data research company, said that short vacations like April 30 clearly reflect the trend of tourists traveling within a 100km radius around Ho Chi Minh City, or with a distance of 300 - 400km, consider going to Nha Trang, Quy Nhon...
Destinations by air that are not crowded but deserted like Phu Quoc this year also need to be re-evaluated for reasons, including airfare.
Ms. Tran Thi Bao Thu, representative of Vietluxtour, also said that travel businesses are worried that the increase in airfares will cool down the peak tourist season. It can be said that road travel has saved the tourism market during the recent holidays.
According to Ms. Huynh Phan Phuong Hoang, Deputy General Director of Vietravel, one of the foreign tours that the company is successfully selling now is the tour to Thailand with a price of 5.5 million VND with an occupancy rate of 100% for the 2024 plan.
"We cooperate with Vietravel Airlines to deploy 54 charter flights with regular departure schedules every week, with extremely preferential prices starting from only 5.6 million VND.
Why is this price achieved? It is the result of proactive cooperation between airlines, destinations and tour operators with the country's tourism department as the conductor. But with domestic tours, it is not easy to do this," Ms. Phuong Hoang admitted.
Need to clarify ticket structure and types
Mr. Nguyen Kiet (Binh Thanh District, Ho Chi Minh City) is concerned about the problem with the ticket ranges that airlines are selling. During peak periods, almost all basic service ticket classes (excluding baggage and additional services) are cheaper than other ticket classes and are often "sold out". On the same flight, the airline announced that there were
12-15 ticket ranges, in fact the cheap ticket range is almost sold out very early, the remaining high-priced tickets. "The agency that controls this ticket range needs to announce or provide information in some way so that customers can understand better" - Mr. Kiet said.
"It's unreasonable that domestic airfares are higher than international airfares. Every holiday or peak travel season, airfares skyrocket unbearably," said Quynh Tran, an employee of a construction company in Ho Chi Minh City.
In response to public and tourism concerns, the Ministry of Transport and the Civil Aviation Authority of Vietnam have begun inspecting airlines regarding ticket sales.
Economist Nguyen Huu Huan, Ho Chi Minh City University of Economics, said that the current high ticket prices or the fact that they are still sold at the prescribed price range is of public concern and needs to be clarified by the authorities. In addition to the cost structure of ticket prices, it is necessary to clarify the ticket sales of airlines. "Is there a range of cheap tickets opened with a certain percentage on flights that are given priority to level 1 agents or are they opened in small quantities and are stuck with high-priced tickets?" - he said.
Meanwhile, airlines assert that ticket prices are based on supply and demand and that the opening prices are in accordance with regulations. Ticket prices for a flight will have 12-15 ranges, from low to high. Buying tickets far from the flight date will be cheaper, buying tickets closer to the flight date will be more expensive based on the law of supply and demand.
Not only during Tet but also during the peak holiday of April 30 or summer, many flights still have the situation of flying at different times, meaning one flight has few passengers and the other flight has many passengers.
Airlines have to take losses on low-passenger flights to serve high-passenger flights, thereby building ticket prices that ensure the interests of both passengers and the airline.
An airline leader explained that the reason why international airfares are cheaper than domestic airfares is due to supply and demand. Because international flights have many competing airlines, flight schedules are seasonal, and setting high prices will lose customers to international airlines, and not flying will lose slots (takeoffs and landings).
However, currently domestically, when supply cannot meet demand, input prices increase, airlines will inevitably have to raise prices, there will be no more low-cost tickets. The number of cheap airline tickets will become increasingly scarce.
"The increase in airfares is due to supply and demand. When a product has many buyers, the price will increase," this leader explained.
Why do airlines make big profits?
In the consolidated financial report for the first quarter of 2024, Vietnam Airlines Corporation (HVN) recorded consolidated net revenue of VND 27,964 billion, an increase of about 19% over the same period last year. Of which, air transport revenue accounted for VND 22,551 billion, an increase of 20%.
In this quarter, Vietnam Airlines recorded "other income" of VND3,634 billion, from Pacific Airlines generating income from debt cancellation under the aircraft return agreement.
Thanks to that, Vietnam Airlines' consolidated net profit reached VND4,441 billion, ending 16 consecutive quarters of losses since COVID-19 struck.
Vietjet Air (VJC) also recorded business results in the first quarter of 2024 with consolidated revenue reaching VND 17,791 billion, up 38% over the same period.
VJC's gross profit improved from VND1,062 billion in the same period to VND1,745 billion in the first quarter of this year. VJC's after-tax profit reached VND540 billion, three times higher than the same period.
Vietravel Airlines also exceeded its target with March revenue reaching VND172.3 billion, up more than 54% compared to the plan. Thus, for the first time after more than three years of operation, Vietravel Airlines has made a profit for three consecutive months, bringing in business results in the first quarter of 2024 with revenue reaching VND491.2 billion, up nearly 42% and net profit reaching VND10.1 billion.
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