DECISION

ON THE MANAGEMENT OF AIR FARES OF THE VIETNAM CIVIL AVIATION

THE PRIME MINISTER

Pursuant to the Law on Organization of the Government of September 30, 1992;
Pursuant to the Law on the Vietnam Civil Aviation in 1991 and the Law on Amendments and Supplements to a Number of Articles of the Law on the Vietnam Civil Aviation in 1995;
At the proposal of the Head of the Vietnam Civil Aviation Department and the chairman of the Government Pricing Commission,

DECIDES:

Article 1.- This Decision provides for the unified State management of the air fares including the passenger fare and the cost of transportation of goods, postal mail and parcels on international and domestic flights, the prices for the hiring of flights in service of the national economy as well as special flights.

The setting of air fares shall have to meet the development requirements of the aviation service and comply with the socio-economic policies of the Party and the State, with the international treaties which Vietnam has signed, ensure the harmonious combination of the interests of the air transport enterprises and the interests of the passengers, and also ensure the discharge of obligations toward the State budget.

Article 2.- Principles for setting the air fares:

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2. The air fares on domestic air routes applicable to foreign citizens or overseas Vietnamese shall be set on the basis of the international air transportation fares, more particularly the fares applied in the neighboring regions. The fares shall be set in Vietnam Dong.

3. The air transportation fares on domestic flights applicable to Vietnamese citizens must assure the compensation for the average cost of air transportation on domestic flights, taking into consideration the compensation between the fares applied to different categories of passengers. It shall be made to suit the capability of payment of Vietnamese passengers, taking into consideration the reasonable ratio to the transportation by other means. It must ensure the necessary profits for the air transport enterprises in order to invest in enlarged reproduction and the discharge of obligations toward the State budget. The fares shall be set in Vietnam Dong.

4. The fares for the chartered flights in service of the national economy and the special flights shall be made to compensate for the expenditures and to ensure against losses to each service flight.

Article 3.- Tasks and competence of various levels, services and business units in the management of the air transportation fees

1. The Prime Minister shall:

a/ Decide the policies and undertakings and principles for setting the air fare rates on international and domestic flights.

b/ Decide the signing of, or empower the concerned ministries and services to negotiate and sign, agreements under the multilateral or bilateral international treaties and agreements on air transportation fares.

c/ Empower the Head of the Vietnam Civil Aviation Department to set the maximum fare applicable to Vietnamese passengers on the Hanoi - Ho chi Minh City air route.

2. Tasks and competence of the Vietnam Civil Aviation Department (hereunder referred to as Aviation Department).

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b/ To draw up projects on policies, principles and modalities for the management of air fares to submit to the Prime Minister and at the same time to guide and direct the airlines to observe the policies and air fare rates set by the competent authorities.

c/ On the basis of the rates of air fares set in the international treaties which Vietnam has signed and the fare rate agreed between Vietnam and other countries, the Aviation Department shall ratify the passenger fares and the cargo fares on international air routes at the proposal of the airlines, and guide these airlines in the implementation of the fare rates already ratified

d/ To be empowered by the Prime Minister to decide the maximum air fare rates mentioned in Point c, Item 1 of Article 3 of this Decision after consulting with the Government Pricing Commission.

e/ To ratify the air fare rates derived from the maximum air fare mentioned in Point c, Item 1 of Article 3 proposed by the airlines and guide the airlines in the implementation of the fare rates already ratified.

f/ To set the air fare rates for passengers who are foreigners or overseas Vietnamese on the domestic flights.

g/ To agree with the General Post Office on the maximum air fares for the printed matters and postal mail transported by air. The transportation fares for goods of the postal service shall comply with the contract between the business enterprises under the General Post Office and the airlines.

3. Tasks and competence of the Government Pricing Commission:

a/ To evaluate the projects of the Aviation Department concerning the undertakings and policies and principles for setting the air fare rates and submit them to the Prime Minister; to discuss and agree with the Aviation Department on the plan for deciding or readjusting the maximum air fare applicable to Vietnamese passengers on domestic flights between Hanoi and Ho Chi Minh City. In case of disagreement it shall submit the plan to the Prime Minister for decision.

b/ To set the rates for chartered flights in service of the national economy and the special flights in case the expenditures for the chartered flights shall be taken from the State budget after discussion with the Ministry of Finance.

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4. Tasks and powers of the air transportation enterprises (hereunder referred to as Airlines).

a/ To observe the policies and airfare rates set by the State and the implementation guidances of the Aviation Department and the specialized managerial agencies. To abide by the regime of periodical reporting on the situation and the air fare rates already set under its jurisdiction to the higher managerial agencies and the specialized managerial agencies.

b/ On the basis of the principles laid down in Item 1, Item 2 of Article 2, to set a concrete table of air fare rates on the different air routes, and report them to the Aviation Department for approval. With the accreditation of the Aviation Department it shall set the concrete air fare rates when there is a fluctuation on the density of passengers and the density of flights with a view to attracting more passengers and making the most of the transportation capacity and achieving the maximal turnover.

c/ On the basis of the principles laid down in Item 3, Article 2 and the maximum air fare rates applicable to Vietnamese passengers on the Hanoi - Ho Chi Minh City route, to design a concrete fare rates table on the other domestic routes and submit it to the Aviation Department for approval.

d/ To set the rates for the air transportation of goods on domestic flights in its reasonable relation with the fares on other means of transport.

e/ To sign contracts on air fares concerning postal mail and parcels with business units under the General Post Office.

f/ To post up at the air ticket sales points the rates of air fares for passengers and goods already approved.

The Aviation Department shall work out the regulation on the relation between it and the airlines in the management of air fare rates in order to concretize Point b, Point c of Item 4 of this Article.

Article 4.- The Head of the Aviation Department shall provide for concrete guidance for the implementation of this Decision.

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All earlier regulations related to air fares which are contrary to this Decision are now annulled.

Article 6.- The Ministers, the Heads of the ministerial-level agencies, the Heads of the agencies attached to the Government, the Presidents of the People's Committees of the provinces and cities directly under the Central Government shall have to implement this Decision.

FOR THE PRIME MINISTER
DEPUTY PRIME MINISTER




Phan Van Khai