The Ministry of Transport has just issued Circular No. 34/2023 adjusting the price frame for passenger transport services on domestic flights.

According to the new Circular, flights from 500km to under 850km have a ceiling price of 2.25 million VND/way, an increase of 50,000 VND compared to the current ceiling price.

Flights from 850km to under 1,000km have a maximum suggested price of 2.89 million VND/ticket, 100,000 VND higher than the current price.

For flights from 1,000km to under 1,280km (the flight distance from Hanoi to Ho Chi Minh City), the new draft proposes a maximum price of 3.4 million VND, 200,000 VND higher than current regulations.

For flights of 1,280km or more, the draft proposes a ceiling price of VND4 million, VND250,000 higher than the current regulation.

For flights under 500km, the transportation price remains the same according to Circular 17. Specifically, the group of flights for socio-economic development still has a maximum price of 1.6 million VND/way. The group of other flights under 500km has a maximum price of 1.7 million VND/way.

These are ceiling prices excluding value added tax, security screening fees, ground service fees collected by the airline and enhanced airline services.

Thus, the Ministry of Transport has officially raised the ceiling price of air tickets. However, the Ministry has not yet considered completely removing the ceiling price as proposed by aviation businesses.

The Ministry of Transport explains that imposing a ceiling on airfares is a regulatory tool of the authorities to ensure access to services for people and avoid monopoly from airlines.

However, the airfare framework applied from 2015 to present is no longer suitable due to a series of accompanying costs, especially increased fuel prices.

Due to financial difficulties, airlines have repeatedly called on the Ministry of Transport to remove the ceiling price on airfares, leaving price regulation to be decided by the free market.