Fare ceilings rise for domestic air services

Jetstar Pacific and Air Mekong raised their economy-class fare ceilings for domestic flights on the weekend, 10 days after a relevant Ministry of Finance decision came into force. The ministry’s Decision 916/QD-BTC, which was issued on April 22 and took effect on April 27, allows Vietnam Airlines and its subsidiary Vietnam Air Service Co. (Vasco), Jetstar Pacific and Air Mekong to charge VND863,636 (almost US$42) for one-way flights of less than 300 kilometers, VND1.1 million for the range of 300 and less than 500 kilometers and around just over VND1.48 million on 500 and below 850 kilometers. The new highest fares are about VND1.9 million for 850 kilometers to less than 1,000 kilometers, around VND2.227 million for 1,000-1,280 kilometers and VND2.727 million (some US$132.5) for single flights longer than 1,280 kilometers. These fares are exclusive of value-added tax (VAT), airport tax and surcharges. Given the new ceilings, Air Mekong can collect from each passenger up to VND2.727 million for a single flight between Hanoi and Phu Quoc off mainland Kien Giang, a longest domestic route that the start-up airline began to fly late last month. Jetstar Pacific said it would be able to charge a one-way fare up to VND2.227 million on the north-south route between Tan Son Nhat and Noi Bai airports. However, this low-cost carrier will maintain its policy to offer different types of fare, with the ceiling accounting for a mere 10%. Air Mekong also takes the same action regarding its fare policy. Truong Thanh Vu of this airline told the Daily on the phone that passengers were able to choose a wide range of new fare categories that will be updated on its website, ticketing offices and agents in the coming days. Vietnam Airlines has not announced their new fare ceilings, though it and other local airlines sought approval to hike their domestic fares by at least over 20% and to gradually remove the price caps in the years to come as a measure to counter operating costs, caused by volatile world oil prices and the rise of Vietnam dong against the U.S. dollar. While the national flag carrier remains tightlipped, Jetstar Pacific and Air Mekong are drumming up their plans to expand domestic operations in central Vietnam. Jetstar Pacific said it would resume daily service between Hanoi and Nha Trang City from May 24, nine months after it suspended this route. Jetstar Pacific plans two daily flights between the capital city and the hot tourist destination in summer. Airtickets starting from VND1.025 million (some US$50) per flight on this route are now available on www.jetstar.com and its ticketing offices and agents. The Hanoi-Nha Trang route will help Jetstar Pacific make full use of its aircraft fleet as it had to call off its daily service between HCMC and Hue until June 13 this year as Phu Bai Airport will be closed from May 13 to have its only runway upgraded. From June 1, Air Mekong will begin its daily service between HCMC and Quy Nhon City in the central province of Binh Dinh as well as make its Hanoi-Phu Quoc service daily to cater to surging demand for air travel to these tourist destinations. Vu of Air Mekong said detailed fares for the new route would be known on May 15 and the carrier would manage to fly convenient times for both business and leisure travelers.