Vietnam plans to unify foreign, local flight costs by '03
HANOI - Vietnam's Civil Aviation Authority and Government Pricing Board have agreed to harmonize the price
of air-tickets for foreign and local travelers by the end of 2003, officials told Dow Jones Newswires Monday.
The pricing board's director, Nguyen Ngoc Tuan, said his organization has agreed to a proposal submitted by the aviation
authority to phase out price discriminations under a plan due to begin this month.
But he noted that "the final decision (whether or not to do so) will be made by the prime minister, and I don't know when that
will happen."
According to the plan agreed by the pricing committee and aviation authority, foreign ticket prices will fall while local ticket
prices will rise in a series of changes phased through the next two years.
For example, a single ticket between Hanoi and Ho Chi Minh City that now costs 1.9 million dong ($1=VND14,4XX) for
foreigners and VND1.0 million for Vietnamese will cost VND1.5 million for all travelers by late 2003, an aviation authority
official said.
The foreign ticket price will fall first to VND 1.8 million, then to VND1.65 million, and finally to VND1.5 million by December
2003.
A local ticket on the same route will rise to VND1.2 million, then to VND1.35 million and finally VND1.5 million, according to
the same timetable, he said.
The move is expected to be widely welcomed by foreign business executives who have long argued that Vietnam's duel-pricing
system makes doing business here too expensive.
An official at Vietnam Airlines Corp. told Dow Jones that plans to unify prices are largely the result of efforts to increase the
state-owned company's revenues, not facilitate foreign businesses.
He said the company has been hurt by the artificially low prices offered to local travelers and will benefit if they are forced to
pay more for air travel.
In a similar move (that likely provided a blue print for Vietnam's efforts) China unified its foreign and local pricing systems in the
early 1990s by raising local prices adn cutting foreign costs.
Separately, Hanoi's pricing authority's Toan noted that proposals have been made to unify other costs that now force foreign
companies and individuals to pay more than their local counterparts.
Such costs include electricity and other utilities charges, some hotel rates, and other state-operated services.
Dow Jones - May 7, 2001.
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