The Ministry of Transport has just sent a written response to the Viet Nam Aviation Business Association (VABA) on the proposal to remove ceiling prices for domestic airfares.

Illustrative image (Photo: baodanang.vn)

Accordingly, the Law on Competition has provided a clear regulation scope and principles to ensure laws on competition.

As for the perspective of price, in the draft Law on Price (revised), it is necessary to keep the ceiling price for domestic airfares so as to ensure State regulations in the context that Viet Nam does not have ideal conditions like other countries in terms of means of transport.

In the future, if air transport services better meet social requirements, and the aviation market has the diverse participation of many Vietnamese airlines, the removal of the cap could ensure compliance with the market mechanism.

According to the Ministry of Transport, if there is no regulation on the ceiling price, it means that the State will give up the regulatory tool and let service providers have full authority to decide the service price.

If airlines were able to set air ticket prices by themselves, it would most certainly lead to high airfares, adversely impacting the interests of consumers, production, business, and society.

According to Circular 17/2019/TT-BGTVT, the price range for economy-class passenger transportation services is calculated based on the route distance.

For routes under 500 kilometres, the maximum one-way fare is VND1.6 million (US$67.8) per ticket for the group of routes for socio-economic development and VND1.7 million for other routes.

The maximum fare for routes between 500 kilometres and less than 850 kilometres is VND2.2 million for a one-way ticket.

For flights between 850 and less than 1,000 kilometres, the maximum price is VND2.79 million per ticket, while for routes of 1,280 kilometres or more, the maximum price for a one-way ticket is VND3.75 million.

Reporting by GIA MINH - Translating by M.DUNG