Aviation authorities recommend fare hikes

The Civil Aviation Administration of Vietnam has proposed increasing domestic fare caps by up to 27 percent due to the depreciation of the dong and airlines’ rising operational costs.

In a recommendation to the Ministry of Transportation, it said the fare ceilings should be hiked by 27 percent on sectors less than 500 kilometers, gradually coming down to 20 percent on routes that are more than 1250 kilometers.

Fares are now capped at 682,000 dong for less than 300 kilometers, 864,000 dong for 300 to 500 kilometers, 1.18 million dong for 500 to 850 kilometers, and 1.819 dong for more than 850 kilometers.

Besides the government devaluation of the currency last month, carriers are also suffering due to higher fuel costs, pilot wages, and aircraft lease prices.

Airlines operating in Vietnam pay 71 percent of their costs in US dollars, with fuel accounting for 36 percent.

Tags: Vietnam aviation, Vietnam aviation industry, Vietnam aviation market

Posted by VBN on Mar 18 2011. Filed under Aviation. You can follow any responses to this entry through the RSS 2.0. You can leave a response or trackback to this entry