At a recent workshop organized by the Vietnam Aviation Business Association on February 24, Deputy General Director of Vietnam Airlines Trinh Ngoc Thanh said the current price framework for airfares in Vietnam are regulated by the Civil Aviation Law, with ceiling and floor prices.
The regulation was issued in 2015 and has become outdated because the factors affecting airfares have changed a lot, but the price brackets have remained unchanged.
According to Thanh, in the past domestic airlines and officials of the Civil Aviation Administration of Vietnam and the Ministry of Transport spoke about this matter yearly, but nothing has changed.
It is now impossible to wait for an amended law to remove the ceiling price regulation, because airlines are facing difficulties.
Mr. Nguyen Manh Quan, General Director of Bamboo Airways, suggested that the Ministry of Transport consider adjusting prices based on actual input factors.
The general director of Bamboo Airways said that the ceiling price regulation should be removed for the air routes that have at least 3 operators. The State should only manage airfares for the air routes that are exclusively operated by only one airline.
Quan said that the removal or raising of the ceiling price does not affect consumers but helps diversify the price policy, helping airlines provide the best quality products to customers.
Aviation expert Luong Hoai Nam said that maintaining the ceiling price of air tickets in Vietnam is "horribly absurd." Therefore, it should be removed as soon as possible.
He added that there is no country in the world that manages airfares by ceiling prices like Vietnam. Setting the ceiling price will make air carriers to lose the opportunity to increase revenue and profit during the peak seasons like summer and Tet holiday (lunar new year).
According to Nam, the role of the state is to create competition, not to manage prices. The removal of the price ceiling does not mean that airlines will negotiate prices, because this is a serious violation of the competition law.
Expert Can Van Luc said that removing the ceiling price of air tickets will increase the ability to attract investment of the aviation industry.
After removing price ceiling, anti-monopoly monitoring tool is needed
Mr. Tran Tho Dat, Chairman of the Science & Training Council of the National Economics University, said that the structure of airfares is very complicated, depending on fuel prices, aircraft rental, human resources and exchange rates.
Therefore, it is recommended to remove the ceiling price and have a formula for managing prices, creating a large fluctuation range, ensuring an equal and transparent level of competition in accordance with the interests of the people.
Economist Le Dang Doanh, former director of the Central Institute for Economic Research, said that there should be an independent committee to manage aviation. This body has independent members with legal responsibility.
Airlines can propose and adjust airfares flexibly, quickly, and in a timelier manner than in the world market, to accurately and adequately reflect input variables such as petrol prices and exchange rate fluctuations.
Tran Dinh Thien, former director of the Vietnam Institute of Economics, noted that the State needs tools to monitor monopuly and price manipulation that can harm customers.