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| New prices for air tickets as of March 1, 2010 (Photo by Thanh Ngoc) |
The Ministry of Transportation has just sent the Ministry of Finance a document requesting to issue a price frame of economy class air tickets for domestic flights.
Accordingly, the ceiling price will increase over VND200,000 ($10.8) from the existing price of VND1.8 million ($96.5).
The Ministry of Transportation has just sent the Ministry of Finance a document requesting that they issue a price frame of economy class air tickets for domestic flights.
Accordingly, the ceiling price will increase by over VND200,000 ($10.8) from the existing price of VND1.8 million ($96.5).
The price frame will be divided into 4 types as listed below: No Distance Maximum price (VND per one way ticket) 1 Below 300 km 681,818 ($36.5) 2 From 300 km to 500 km 863,636 ($46.3) 3 From 500 km to 850 km 1,181,818 ($63.4) 4 Over 850 km 1,818,182 ($97.5)
If the proposed price is approved by the Ministry of Finance, the highest price for economy seating departing from Hanoi to Ho Chi Minh City will go up to VND2 million ($107) from VND1.8 million ($96.5). The ceiling price will be applied as of March 1, 2010 and include 10 percent VAT tax and airport fees.
According to experts, this move will help to meet increasing demands during peak period in the market.
While flights from Ho Chi Minh City to Hanoi are always on high demand, especially near Tet, the return way is on low demand.
Customers will benefit from this policy when the ceiling price increases, according to a leader of a domestic airline. When the ceiling ticket price is high, customers will have to pay more money if they buy tickets near their flying date. Eventually, there will be more cheap seats available to those who book in advance because ticket prices will be adjusted in order to come up with a profitable average price.
In addition, the price will be more diversified and boost the market growth. It’s true not only in the air transportation industry but also in any fields. Demand stimulus methods always target “price sensitive” customers.
Recently the domestic airline market has grown at only 10 percent per year. It’s necessary to apply this demand stimulus method for its surge.
