The ceiling airfare for the HCM City-Hanoi route once was raised to 5 million dong (return ticket) in May 2011, and then to 6 million dong. Meanwhile, the figure may raise to 8 million dong, if the proposal by airlines to lift the airfare is approved by the Ministry of Finance.
The information about the ceiling airfare increase has caused big worries to travel firms which complain that this would kill the tourism industry, because it makes the industry less competitive.
No need to raise prices in difficult period
Nguyen Phuong Nam, Director of the Phuc Tien Booking Agent in HCM City, said that the ceiling airfare increase would put big difficulties for travel firms.
“In the past, we sold tickets mostly to the companies which booked tickets for their staff’s business trips. However, the companies only book tickets when it is really necessary, because the air tickets have become too expensive,” Nam said.
“Previously, a lot of companies paid for the air tickets of their staff in vacation trips, but they have cut the spending,” he added.
He stressed that the 20 percent increase is really a sharp increase in the context of the current difficulties of the national economy. As everything is getting more expensive, consumers have to fasten their belt. “Is it really necessary for airlines to raise the ceiling airfares in such circumstances?” he questioned.
Travel firms entreating God
Nguyen Vu Manh Ha, Head of the Operation Division of Ha Dat Travel Firm in HCM City, said that the airfare increase has caused a headache to small and medium travel firms.
According to Ha, in order to ease the risks from the airfare increases, big travel firms can set up a booking agent to serve their tours, or they can spend money to buy all low-cost tickets several months before the departure time, which allows them to ease the costs, while small firms cannot do that. The firms have to book tickets from air carriers or from the travel firms and they would lose contracts if they cannot get tickets.
As such, bigger travel firms would get richer, while small firms would be at a big disadvantage because of the limited financial capability. Meanwhile, they still have to pay additional money to buy back tickets from bigger travel firms.
He went on to say that if the domestic airfare increases, it would be more costly to travel domestically than abroad. This would prompt Vietnamese travelers to choose to travel abroad, while foreign travelers would rather to go to other South East Asian countries than to Vietnam.
Travel firms have warned that once the domestic airfare continues increasing, this may lead to the “foreign currency bleeding.”
Tran Thi Lan Phuong from Dai Hung Son Company in HCM City said that the demand for traveling has been increasing, and that domestic travelers are really the important source of income for domestic airlines.
People nowadays usually compare the airfares offered by different air carriers, while the majority of medium and high income earners now choose foreign destinations for their trips. Meanwhile, foreigners would have to think about whether to travel to Vietnam if they have to pay high, while the number of tourism points is less than expected.
This would push Vietnamese tourism industry against the wall, while the national economy may face the “foreign currency bleeding,” because Vietnamese and foreigners pay more money to foreign firms.
“I think that the Ministry of Finance needs to consider if the proposal on raising airfare is suitable for now, when the CPI increases are very high,” she said.
Dat Viet
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