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Aviation service fees to increase

Released at: 14:29, 19/08/2017

Aviation service fees to increase

Photo: Cand.com.vn

Fees and charges to increase in October and some again in July next year.

by Le Diem

The Ministry of Transport has decided to increase service fees for all carriers using Vietnam’s airports from October, to cover investments in the airport network and improve service quality.

Costs incurred each time a plane lands or takes off will rise by 5 per cent from October and a further 5 per cent from July next year. A 15 per cent charge will also be imposed on aircraft taking off or landing during peak hours, while those doing so during off-peak hours will pay 15 per cent less. The move aims to encourage airlines to manage their flight times effectively to avoid overload at airports during peak hours.

Following the initial increase, airlines will have to pay from VND700,000 to VND5.8 million ($30 to $255) for each take-off and landing, depending on the size of the aircraft.

Security fees will also increase, by just $1.5 to $2 for passengers on international flights and $0.4 to $0.5 for those on domestic flights. Service charges will also rise, from $3 to $3.5, with a further increase next July.

Compared with elsewhere in ASEAN, Vietnam’s service charges for domestic flights are lower, at 47-68 per cent of the regional average, depending on the type of aircraft.

Mr. Lai Xuan Thanh, Chairman of the Board at Airports Corporation of Vietnam, said the current price schedule includes a subsidy for domestic transport and take-off and landing fees are only 34 per cent of the international average. Service fees for domestic passengers are also very low, at only 14.8 per cent of the international average.

There is an imbalance between the cost of air transport and other modes of transport.

For example, Vietjet Air and Jetstar Pacific’s tickets on the Hanoi to Ho Chi Minh City route average VND865,000 ($38) one way, while the train fare between the two cities is from VND1.3 to 1.5 million ($57 to 66) one way. This is unreasonable, according to Mr. Thanh, making these adjustments necessary to fund investment in airport infrastructure.

Airlines said the move will increase their costs but the impact will be negligible because airfares are quite low at the moment. Airlines are flexible in offering air tickets at different prices and times to provide various options to passengers.

Vietnam welcomed 7.2 million foreign visitors and 46.9 million domestic travelers in the first seven months of 2017, up 25.7 per cent and 28.8 per cent, respectively, year-on-year, according to the General Statistics Office.

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