A 20 percent rise in airfare ceiling prices has been proposed to solve difficulties for businesses.
The proposal was discussed by the Ministry of Transport and theMinistry of Finance and a new ceiling price was expected by the end ofnext month.
The proposal follows approaches by the VietnamCivil Aviation Administration and many domestic airlines asking forpermission to increase ticket prices to avoid losses
due to the change in the exchange rate.
Department of Transport Director Tran Ngoc Thanh said the depreciationof the dong had raised the cost of fuel and services at airports.
The Ministry of Transport had agreed with the proposal to increase theceiling price by 20 percent and will send it to the Ministry of Financefor appraisal, he said.
In its deliberations, the FinanceMinistry will calculate how much of the burden business will have toshare in accordance with Resolution 11 of the Government to curbinflation.
The new ceiling price will be applied by the end of next month if the plan was approved by the Finance Ministry.
Air Mekong CEO Doan Quoc Viet said an airfare price adjustment wasnecessary to ensure the existence and development of air businesses.However, the actual airfare price adjustment depended on market demand.
Raising the ceiling price did not necessarily mean that airfares willhit the ceiling but rather it will create a framework for air companiesto set airfares in a flexible manner.
He added thatraising the ceiling price will help ease difficulties but will notcompletely compensate for extra expenses of air companies.
Viet said air services were regarded as a luxury for average incomeearners and entrepreneurs. Air service prices did not have muchinfluence on CPI but air transport had an important impact on economicdevelopment./.
The proposal was discussed by the Ministry of Transport and theMinistry of Finance and a new ceiling price was expected by the end ofnext month.
The proposal follows approaches by the VietnamCivil Aviation Administration and many domestic airlines asking forpermission to increase ticket prices to avoid losses
due to the change in the exchange rate.
Department of Transport Director Tran Ngoc Thanh said the depreciationof the dong had raised the cost of fuel and services at airports.
The Ministry of Transport had agreed with the proposal to increase theceiling price by 20 percent and will send it to the Ministry of Financefor appraisal, he said.
In its deliberations, the FinanceMinistry will calculate how much of the burden business will have toshare in accordance with Resolution 11 of the Government to curbinflation.
The new ceiling price will be applied by the end of next month if the plan was approved by the Finance Ministry.
Air Mekong CEO Doan Quoc Viet said an airfare price adjustment wasnecessary to ensure the existence and development of air businesses.However, the actual airfare price adjustment depended on market demand.
Raising the ceiling price did not necessarily mean that airfares willhit the ceiling but rather it will create a framework for air companiesto set airfares in a flexible manner.
He added thatraising the ceiling price will help ease difficulties but will notcompletely compensate for extra expenses of air companies.
Viet said air services were regarded as a luxury for average incomeearners and entrepreneurs. Air service prices did not have muchinfluence on CPI but air transport had an important impact on economicdevelopment./.
