Rising costs:A VietJet aircraft preparing to take off from Hanoi. Domestic airfares in Vietnam have been rising due to higher fuel costs and a shortage of planes. — AFP
HANOI: Domestic air-ticket prices have become a headache for many families and tourists making travel decisions.
This is not only affecting consumer pockets, but also the domestic tourism and aviation industries as well, analysts said.
The average price for economy-class tickets on Vietnam’s domestic routes has surged by up to 25% year-on-year.
“Aside from Vietnam, airfares are generally high worldwide because prices are the function of supply and demand,” said Subhas Menon, director general of the Association of Asia Pacific Airlines.
“If demand is much more than supply, then prices tend to be high. So this is the case now. Just look at aircraft deliveries and delays. Supply is not keeping up with demand.”
Economist Dinh Trong Thinh from the Academy of Finance said there were few airlines in Vietnam and very few planes.
Aircraft recalls for inspection and repairs and the modest quantity of newly leased aircraft have led to a significant decline in the number of commercial planes in Vietnam, Thinh said.
He said the more airlines a market has, the more competitive it would be, and airlines have to find ways to lower ticket prices to meet passenger needs. However, it would be a complicated matter to form new carriers in Vietnam.
In developed countries, high travel demand has resulted in many airlines. At the same time, costs can be reduced thanks to a high volume of passengers. Furthermore, these countries also have many low-cost airlines that have slashed services to make ticket prices more affordable.
In addition to increasing the market competition, the authorities should also consider reducing taxes and fees charged on airline tickets, Thinh said.
According to aviation experts, to balance the benefits between airlines, tourism, and customers, not only should airlines reduce ticket prices, but stakeholders in the tourism industry, including travel companies, hotels, and travel service providers, have to cooperate more closely.
Others involved in the travel industry see affordable comprehensive travel packages as an effective solution. Airlines can team up with hotels and tourism service providers to offer all-inclusive travel packages, helping travellers save time and money in planning. They also suggested appropriate tax and fee calculations to lower ticket prices.
Nguyen Quoc Ky, chairman of Vietravel Airlines, said the shortage of aircraft and input cost hikes would continue to beset the aviation industry, at least until the end of the year. Thus, the cooperation of different sectors is needed to reduce the price of flights.
Areas that want to stimulate tourism could encourage and consider supporting airlines when they open new routes. In return, airlines could help travel businesses by reducing deposits for bookings or allowing them to divide payment into several payments, Ky said during a recent conference in Ho Chi Minh City.
He added that local governments, tourism service providers, travel firms, and airlines should assist each other based on a common supportive policy from the government.
Aviation experts agree. They have petitioned the government and tourism management agencies to consider reducing taxes and fees to encourage tourism and create better conditions for the aviation industry. — Viet Nam News/ANN
