Vietnam Air not allowed to raise fares
HANOI - Vietnam Airlines said yesterday the government had denied it permission to hike ticket prices to compensate for rising fuel costs.
Nguyen Chan, spokesman for the state-owned carrier, said Deputy Finance Minister Nguyen Ngoc Tuan on Saturday formally rejected the request made last month.
'The minister said Vietnam Airlines' ticket prices must comply with the government's policy to control price rises,' he said.
Earlier this month Prime Minister Phan Van Khai ordered a budget spending cut of 10 per cent for this year in a bid to put the brakes on rising inflation and prevent the communist nation's economic growth from being derailed.
The government fears inflation could hit 12 per cent this year.
State media reported that Mr Tuan advised Vietnam Airlines to ask the government to adjust the tax rate for its fuel imports and urged it to scale back its marketing campaign in order to absorb the cost of soaring oil prices.
In June the carrier levied a US$5 fuel surcharge per ticket on all international routes.
Big names in the Asian air industry, including Hong Kong's Cathay Pacific, Japan Airlines and Australia's Qantas, have all indicated that recent oil price rises could force them to levy further fuel surcharges on ticket prices.
Agence France Presse - August 17, 2004.
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