Vietnam Airlines once again calls for setting minimum fares
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Vietnam Airlines wants aviation authorities to set floor fares and increase the ceiling, saying it would ensure fair competition among carriers.
In a proposal it sent to the Civil Aviation Authority of Vietnam, it wants the fare ceiling to be increased by VND50,000-250,000 ($2.17-10.86), and minimum fares to be 35 percent of the ceiling, or VND787,500-1.01 million.
It claimed having minimum fares would ensure fair competition among airlines and help them overcome the hardship caused by the Covid-19 outbreak, but said they could be scrapped once the aviation industry recovers from the pandemic.
Analysts said if the proposal is accepted, airlines would not be able to offer free flight tickets under promotions, and tourism companies and passengers would be the losers.
In 2017, Vietnam Airlines had suggested fixing minimum domestic fares of VND1.54-4.2 million ($68-$185), while its subsidiary Jetstar Pacific had proposed VND600,000-1.2 million.
But both were rejected by the Ministry of Transport.
Questions & Answers
Q.What specifically has Vietnam Airlines proposed regarding ticket prices?
What specifically has Vietnam Airlines proposed regarding ticket prices?
Vietnam Airlines has proposed increasing the fare ceiling by VND50,000-250,000 and setting minimum fares at 35 percent of the ceiling, which would be VND787,500-1.01 million.
Q.Why does Vietnam Airlines believe minimum fares are necessary?
Why does Vietnam Airlines believe minimum fares are necessary?
The airline claims minimum fares would ensure fair competition among carriers and help them recover from the financial difficulties caused by the Covid-19 pandemic. They suggest these could be temporary measures.
Q.What would be the likely negative consequences if this proposal were accepted?
What would be the likely negative consequences if this proposal were accepted?
Analysts suggest that airlines would no longer be able to offer free promotional tickets. This would primarily disadvantage tourism companies and passengers, who would face higher travel costs.
Q.Have similar proposals for minimum fares been made in the past?
Have similar proposals for minimum fares been made in the past?
Yes, Vietnam Airlines previously suggested fixing minimum domestic fares in 2017, and its subsidiary Jetstar Pacific also made a similar proposal. Both were ultimately rejected by the Ministry of Transport.
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