Airlines want minimum fares, no one else wants
If the fares don’t even compensate for the fuel costs of a flight, aviation safety would be affected, Vietnam Airlines chairman Dang Ngoc Hoa said at a meeting on Monday to get comments from economists on minimum fares. proposed.
The Vietnam Civil Aviation Administration (CAAV) has proposed minimum fares of 320,000 VND to 750,000 VND ($ 14.06 – $ 32.95) for domestic flights between November 1 and October 31. next year to help airlines overcome the hardships caused by the Covid-19 pandemic. .
Too low prices would weaken all airlines, Hoa said. Many countries like China and India have floor prices for airline tickets, he said.
He said that amid the pandemic, fares were very low, just 40% of 2018-19, and 250 planes are parked at airports, some of which lack parking.
But despite the low fares, airlines must continue to operate to maintain parking space, minimum cash flow and planes, he said.
During the first outbreak of Covid in March 2020, there were three thefts per day in total, while during the fourth wave starting in April 2021, notably in July-August, “there was no theft” , he clarified.
All carriers have been affected and most airlines are facing losses, he said.
Vietnam Airlines recorded a loss of 7 trillion VND ($ 301.7 million) in the first half of the year, while private airlines reported losses of 1,000 billion dong, he said. added.
But despite his heated argument, economists at the meeting said minimum tariffs are not acceptable.
Can Van Luc, chief economist of BIDV, said the price floors could be confusing and unfair for public and private companies, and even violate the price law and the business law.
Nguyen Sy Dung, former deputy head of the National Assembly office, said, “It is unfair to impose a floor price on airline tickets.”
If minimum fares are applied, a three-star airline must sell for the same price as a five-star airline, and no customer would spend money to travel in the former, he stressed.
“We could kill an airline by the price policy. This is unacceptable.”
In a recent communication to the Ministry of Transport, three airlines agreed to apply floor-price air fares while two others disagreed.
The Department of Transport admitted that since costs and services are not comparable, it would be difficult to determine common minimum fares applicable to all airlines.
In the first seven months of this year, Vietnamese carriers carried 13.7 million passengers, down 57.7% from the same period in 2019.