The fall in oil prices has so far not translated into a fare reduction on Vietnam’s domestic air routes, according to the Central Aviation Authority of Vietnam. The agency decided consequently to ask local airlines to reduce airfares following the decrease in the price of jet fuel which decreased from US$85 per barrel last December to only US$57 in August of this year.
According to CAAV, fuel makes up nearly 40 percent of total costs of the airlines and ticket prices should reduce once fuel prices drops.
Vo Huy Cuong, CAAV deputy director, asked the carriers to sell more low cost flight tickets and more promotions to attract passengers. Vietnam’s Ministry of Finance already reduced unilaterally the maximum price per kilometer for economy flight tickets to VND4,250 per person from VND5,000, following a drop in fuel price.