National flag carrier Vietnam Airlines (VNA) has asked the government to allow it to increase airfare caps for domestic routes amid the dong’s depreciation against the US dollar, Pham Ngoc Minh, general director of the airline, said.

Also, the airline is likely to raise airfares by 20% as of March 15

The government in the future should allow airlines to add extra costs to ticket prices whenever fuel prices surge, VNA said.

It also suggested the government scrap those caps between 2013 and 2014, Minh added.

VNA suffered an approximate US$30 million in losses on domestic air routes, Minh said.

Airfares for domestic air routes are now capped at VND682,000 ($32.97), VND864,000 ($41.76), VND1.182 million ($57.13), and VND1.819 million ($87.93), depending on distances.

If the price caps are to be abolished, airlines will be able to offer different prices that suit a wide variety of passengers, a representative from a carrier remarked.

20% fare hike

Vietnam Airlines notified Tuesday its ticket agents and travel agencies of a 20 percent hike in airfares for domestic flights, Sai Gon Tiep Thi reported.

Though still under discussion, the new prices will almost certainly be applicable as from March 15, the newspaper said.

Ta Huu Thanh, deputy general director of low-cost carrier Jetstar Pacific, revealed each airline had incurred differences of hundreds of billions of dong last year due to exchange rate fluctuation.

“If the caps are not to be lifted, airlines would not stand it since global oil prices have topped $100 a barrel.”

Vietnam Airlines, established as the Vietnam Civil Aviation Department in 1956, now flies to 46 destinations in 19 countries using a fleet of 70 aircraft.

The fleet is expected to reach 104 and 150 in 2015 and 2020, respectively.

Source: Tuoi Tre