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Jetstar Pacific welcomes Vietnam rise in fare caps

Time is GMT + 8 hours
Posted: 21-Nov-2008 16:06 hrs

Jetstar Pacific, a Vietnamese low-cost airline part-owned by Qantas, has welcomed the communist government's decision to allow more flexible pricing on some domestic routes.

"This will allow Jetstar Pacific to be more flexible in the product it offers and importantly allow even more passengers to purchase low fares," the airline said.

The government has decided to lift the price ceiling on domestic routes on which two or more airlines fly, allowing carriers to fix their own prices based on demand, Vietnamese state media reported this week.

This enables carriers to charge higher prices for some peak-time flights while offering cheaper tickets during less busy periods, a key aspect of the low-cost airline business model.

"As a result of these regulatory improvements, Jetstar Pacific will be better placed to implement a low cost price structure according to market demand and better manage yields," the airline said in an email to AFP.

However, the company also said that "there remains an overly complex administrative burden to price regulation on domestic routes, which ultimately adds unnecessary costs to the ticket prices for the customer."

Jetstar Pacific, which launched operations last May, said that during the Tet lunar New Year next January, the busiest travel time of the year, it plans to "increase domestic capacity in order to meet high demand."

National flag carrier Vietnam Airlines, which also plans to put on extra flights, said Wednesday it would not raise domestic ticket prices during Tet, the Thanh Nien daily reported quoting general director Pham Ngoc Minh.

State-owned Vietnam Airlines, its subsidiary Vasco and Jetstar Pacific are the three airlines now serving domestic routes, and Indochina Airlines said in October it would start flying domestic routes this month. — AFP