Domestic flight ticket prices are too high, why?

According to airlines, the reason is that input costs calculated in USD such as gasoline, aircraft rental, pilot hire… increase with USD prices, not to mention the sharp decrease in the number of aircraft. Meanwhile, experts believe that domestic air ticket prices are too high due to the lack of connection between aviation and tourism, and not receiving support in tax and fee policies…

Travel is having difficulty with airfare prices

According to a survey of ticket prices on April 23 on the airlines’ websites, many domestic flights to tourist destinations Da Nang, Phu Quoc, and Nha Trang on April 30 and May 1 are nearly full. On flights with tickets still available, ticket prices show no signs of decreasing closer to the date as in previous years.

For example, the route Ho Chi Minh City – Nha Trang, Da Nang costs 4.5 – 6 million VND/round trip. While flying this route on a normal day only costs about 2.3 million VND. Passengers flying from Hanoi – Phu Quoc on holidays are being priced by the airline at 7 – 12 million VND/round-trip ticket, while weekdays range from 2.9 – 4 million VND.

This causes the number of tourists traveling by air at some destinations to be forecast to decrease sharply compared to previous years. Meanwhile, surveys on the websites of many travel agencies show that tour prices are sold cheaper than round-trip airfares.

For example, Vietravel Company is still accepting customers booking package tours (including air tickets, meals, hotels…) from Ho Chi Minh City to Thailand for 5 days and 4 nights at 8.9 million VND. /guest.

Mr. Nguyen Bao Chau (Binh Thanh district, Ho Chi Minh City) said that air ticket prices for this year’s April 30 holiday are not only high but also scarce. For a travel trip, the price of an air ticket of 5-6 million VND is too high, while many package tours, especially 4-5 days to Thailand, have the same price as the air ticket.

Mr. Minh Tuan (Phu Nhuan), in charge of industrial equipment sales in Ho Chi Minh City for a foreign company, believes that peak season airfare prices should be softer due to the high occupancy rate for both directions. Going and coming back were both very good. “A full flight costs less than an empty flight, so the ticket price should be reduced,” Mr. Tuan said.

Airlines say it is difficult to reduce ticket prices

Talking to Tuoi Tre, the general director of an airline said that flight ticket prices are high due to the characteristics of aviation, which are many transactions with foreign airlines, from service maintenance, aircraft procurement, asset leasing, and leasing. Pilots… all pay in USD.

“Even a damaged airplane screw has a purchase value of several hundred to thousands of dollars. When the USD exchange rate increases, input costs also increase, and airfare prices are also pushed up,” this person said.

According to Mr. Dang Ngoc Hoa – Chairman of the Board of Directors of Vietnam Airlines, for every 1% exchange rate fluctuation, this airline loses 300 billion VND. In 2023, with exchange rate fluctuations alone, this company will lose up to 903 billion VND. In addition, rising fuel prices also affect the input costs of airlines.

For example, before the epidemic, oil prices were 98 – 115 USD/barrel but now fluctuate between 120 – 130 USD/barrel. Sharp increases in input costs forced airlines to adjust ticket prices but still remained within the ceiling price frame prescribed by the State. “However, ticket prices for the April 30 holiday and peak summer prices will be different from the low season prices,” this person said.

The decrease in the number of aircraft also affects people’s travel. To date, 22 aircraft have had their engines removed under the manufacturer’s recall for repair. Except for Vietnam Airlines and Vietjet, the number of aircraft of three airlines, Bamboo Airways, Vietravel Airlines and Pacific Airlines, decreased from 30 to six, of which Pacific Airlines no longer has any aircraft.

Mr. Dinh Viet Thang, director of the Vietnam Aviation Administration, said that the lack of aircraft is happening globally, so renting aircraft is both difficult and expensive. Specifically, before Tet 2024, the price to rent an Airbus A321 aircraft was 2,300 USD/hour, and now the price has reached 4,000 USD/hour. However, airlines say it is difficult to rent planes.

Lack of connection makes it difficult to reduce airfare prices

Explaining why domestic airfare prices are even higher than package tour prices to some countries, the director of a travel business said that these destinations have a close connection between aviation and tourism. , not to mention some countries also have policies to subsidize air tickets to attract tourists.

For example, in early April, Thailand decided to support airlines to reduce ticket prices by 3.8 – 14% on some domestic routes during the Songkran water festival. Flights between Bangkok and Chiang Mai, Krabi and Phuket are limited to 3,000 baht (more than 2 million VND) per flight.

These airlines launch many promotions, even reducing ticket prices by 15-20% to attract tourists from China, Malaysia, Indonesia, Vietnam… to travel to Thailand during this holiday season.

“Thailand determines that the source of revenue is not only airfare, but all tourist spending. Cheap airfare, the number of tourists traveling to Thailand has increased 3-4 times, which is what this country’s tourism industry is proud of. target”, a tourism expert affirmed.

Mr. Jonathan Hanh Nguyen, Chairman of the Board of Directors of Pan Pacific Group, also said that when linking aviation – tourism, airfares can be cheap and the airline does not suffer a loss, because costs are offset from Associated services such as booking tours, resorts, shopping, dining…

According to Mr. Hanh Nguyen, downtown duty free shops or premium outlets are about to be established in some cities in Vietnam, which will attract tourists to buy. Shop around if the airfare is reasonable.

“For example, with 20 million passengers going to/from Vietnam, not only airlines can attract customers, but for station service fees and security screening fees of 20 USD/passenger, the airport has already collected 400 million USD,” Mr. Jonathan Hanh Nguyen said.