Airfare in Vietnam to increase

With the approval of the new bases of ceiling airfares by the Aviation Authority of Vietnam which started coming into effect from 27-April-2011, all air carriers in the country have got plans for increasing the airfares accordingly. Jetstar Pacific và Air Mekong started applying the new airfare bases from 7-May-2011; and Vietnam Airlines, the biggest airline in Vietnam which accounts for about 70% of the market share, starts increasing airfares from 16-May-2011.  The newly approved ceiling airfares increase from 20-23% compared to the earlier bases.

Vietnam has been suffering from high inflation since beginning of 2011 which is exacerbated by hiking fuel prices. Transport by car and by railways have also been in the hike since. Tour operators and travel agencies in Vietnam are seeking tax incentive from the government to cope with rising input costs. Economists from the World Bank and the ADB forecast inflation in Vietnam may peak at 16% in Q3 and may be more tamed from Q1, 2012.