Vietnam aviation authority proposes removal of ceiling rates on airfares

The Civil Aviation Authority of Vietnam (CAAV) has proposed the removal of the cap for airfares on domestic flight routes operated by at least three carriers. It made the request in a draft report reviewing the implementation of the 2006 Law on Civil Aviation of Vietnam and the revised edition in 2014. It said the domestic transportation market has become very competitive with more and more airlines. The CAAV has proposed on routes with three or more airlines operating together, airlines can decide their own domestic ticket prices and list them according to regulations. At present, the ceiling rates of domestic airfares are decided based on distance in accordance with State regulations. The basic economy fares are applicable from August 2015 for five groups of air routes, stand between US$70-$163, depending on distance and excluding additional costs. Ceiling prices will limit airlines from improving flight service quality. This will affect the airlines 'ability to compete on quality of service', an important factor in sustainable development, CAAV, stated in a report submitted to the Ministry of Transport. <br/>