Vietnam's aviation authorities insist domestic airfares remain within regulated boundaries, even as airline profits soar and travelers grapple with escalating costs. However, this delicate equilibrium between profitability and affordability may be approaching its breaking point, jeopardizing the nation's aspirations to bolster domestic tourism.
The Ministry of Finance has proposed that the reduction on the environmental protection tax for jet fuel be changed from the current 30 per cent to 50 per cent from January 1 to the end of 2022. If approved, the 2022 budget would see revenue fall by more than VND1.5 trillion ($66.11 million). The policy will increase the financial capacity of airlines to overcome the difficulties from Covid-19.
Flight numbers were quite low during the first days of a pilot reopening of domestic flights, at just 50 per cent of those scheduled. The Civil Aviation Authority of Vietnam (CAAV) has proposed increasing flight frequency to six flights a day on the three largest routes in the country - Hanoi-Da Nang, Hanoi-Ho Chi Minh City, and Da Nang-Ho Chi Minh City.
The Civil Aviation Authority of Vietnam has increased the floor prices of plane tickets, which may cause passenger demand to fall and affect other sectors such as tourism and travel.
