Sky-high costs: Why flying in Vietnam is becoming a luxury

Flying to Vietnam has become increasingly costly for tourists, with airfares reaching unprecedented heights. But what’s driving these price hikes, and why are neighbouring countries like Thailand offering cheaper alternatives?

Deputy Minister of Transport Nguyen Danh Huy highlighted the factors propelling Vietnam’s flight costs to stratospheric levels during a recent session of the National Assembly. According to Huy, Vietnam Airlines has witnessed a staggering 14 to 20% surge in average ticket prices since the close of 2023, now peaking between US$0.08 to 0.12 per kilometre.

The deputy minister attributed this surge to a perfect storm of economic woes: the relentless march of exchange rate fluctuations, the unrelenting climb of fuel costs, and Thailand’s astute tourism promotions siphoning away potential passengers.

“The US dollar’s 5% appreciation against the Vietnamese dong this year alone could spell a 300 billion dong (US$12.1 million) annual loss for Vietnam Airlines.”

Fuel costs, once a modest 25% of fare allocations pre-pandemic, now devour a hefty 40%, adding further strain to Vietnam’s aviation economy. Moreover, an aircraft deficit exacerbates the issue, with many airlines forced to ground their A321s due to engine woes, necessitating costly leases.

Despite such challenges, Huy contends that Vietnam Airlines’ domestic fares remain comparatively modest, even in the face of China’s US$0.27 to 0.3 (approximately 9.8 to 10.9 baht) per kilometre flight fees. However, recent revelations have sparked outrage among Vietnamese flyers, with some discovering it’s cheaper to detour through Thailand, notably on routes like Hanoi to HCMC.

Huy warns of potential price spikes for last-minute bookings, advocating for proactive ticket purchases, reported VN Express.

With Vietnamese airlines witnessing a 5% dip in passengers last quarter, the Ministry of Transport advocates for cost vigilance, nocturnal flights, and wider aircraft to stabilise soaring fares.

In related news, Thailand’s booming aviation sector has given Thai airlines Bangkok Airways and Thai AirAsia a profitable first quarter, despite the challenges posed by escalating costs.

Bangkok Airways, known for catering to leisure travellers, reported a robust comeback with tourist arrivals reaching 87% of pre-pandemic levels in the first three months of 2024. A standout achievement was the launch of direct flights from Koh Samui to Chongqing and Chengdu in China.