Vietnam transport minister orders probe into domestic airfare surge

Transport Minister Nguyen Van Thang has asked the Civil Aviation Authority of Vietnam (CAAV) to investigate recent surges in domestic airfare as concerns mount over their impact on travel demand.

It has been reported that the price surges have directly impacted travel demand during peak periods like the five-day Reunification Day-May Day (April 30-May 1) holiday.

The minister asked the CAAV to check implementation of air ticket sales and pricing, as well as transparency and disclosure of airfare information.

The aviation watchdog must promptly rectify and handle any violations found and ensure that airfare increases do not exceed regulations, he said.

Thang asked the ministry’s transportation department to report on the reinforcement of transport activity inspections, stabilization of ticket prices, and prevention of unregulated price hikes, especially during the upcoming peak summer season.

Both CAAV and the department are required to submit reports to the minister by May 10.

During the recent five-day holiday (April 26-May 1), passenger traffic at airports managed by the Airports Corporation of Vietnam (ACV) reached nearly 1.8 million arrivals, down 6.56% year-over year. Of those, 667,631 were international arrivals, up 31.16% year-over-year, while local passenger number decreased 20.39% to 1.1 million.

ACV reported 11,039 aircraft landings and take-offs during the holiday, of which 4,118 were of international flights (up 17.19% year-over-year), with domestic operations declining 21.01% year-on-year.

Earlier, local carriers and CAAV chief Dinh Viet Thang had attributed the recent domestic airfare surges to a shortage of aircraft in their fleets.

Airplane engine manufacturer Pratt & Whitney has recalled a number of A321Neo aircraft operated by Vietnam Airlines (HoSE: HVN) and Vietjet Air (HoSE: VJC). A total of 42 planes operated by local carriers could be grounded by end-2024.

As of March 31, Vietnam had a fleet of 205 aircraft, with 159 in service, 20 under regular maintenance, and 26 undergoing engine checks and repairs at the manufacturer’s request, Thang had said at a ministerial meeting on April 1. "It may take until 2026 or 2027 for the repairs to be completed."

Besides, Bamboo Airways has suspended three Embraer E190 planes and some niche air routes as part of a restructuring effort. HVN subsidiary Pacific Airlines has returned all leased airplanes due to financial difficulties, and plans to dry-lease three planes from Vietnam Airlines to maintain the minimum fleet required for its Air Operator Certificate (AOC).

A report by Mekong ASEAN online magazine said that during the five-day holiday, round-trip tickets from Hanoi to the central city of Danang and the beach town of Nha Trang, ranged from VND4.5 to VND5 million ($177-$197), an increase of VND1.2-1.5 million over regular days.

It said routes connecting Hanoi to Phu Quoc island and the central beach town of Quy Nhon recorded the highest airfares of VND5-7 million ($197-275) for a round-trip ticket. A round-trip flight from HCMC to Phu Quoc cost VND3-3.9 million ($118-$153), while fares on the HCMC-Nha Trang route ranged from VND2.7 to VND3.2 million ($106-$126).

According to the General Statistics Office, Vietnam’s consumer price index (CPI), an inflation gauge, rose 4.4% year-over-year in April. Notably, transportation prices jumped 1.95% month-over-month, leading to a 10.42% month-over-month surge in air transportation prices.