Plunging demand drags down international airfares

Oanh, who works in Japan, usually has to book tickets four or five months in advance to visit Ho Chi Minh City in autumn due to high demand, but this year it had been a breeze and fares are much lower than usual.

A return trip from Osaka to HCMC, which used to cost VND6-8 million (US$250-340), only cost her VND4.5 million this year, a 25% reduction.

Hoa of HCMC’s Tan Binh District said she recently booked tickets to Taipei for VND3.8 million, a 24% decline from usual levels.

“This is even cheaper than some domestic routes such as HCMC-Hanoi.”

Fares from Vietnam to Northeast Asian destinations such as China, Japan, South Korea, and Hong Kong have declined by 20-30%.

Prices from HCMC and Hanoi to Thailand are down 5-10% to the lowest levels in three years.

Tickets to Europe cost around 5% less.

Quynh Hoa, a ticket seller for Vietjet Air, said fares climbed to record levels last year but have now plummeted.

They have fallen to multi-year lows on some routes like HCMC to Hong Kong on which tickets are available for VND3 million on certain days.

Hang Quang Tuan, director of a ticketing office that partners Vietnam Airlines, said in his 12-year career the state-owned airline has never offered a “buy one get one free” ticket promotion program such as this year.

“Traveling is cheap this year, regardless of destination, except for the U.S.”

Last month he sold return tickets from HCMC to South Korea at VND3.1 million, a new bottom.

The price falls are due to a slow recovery in international travel amid inflation and tightening of purse strings, he said.

Tourists prefer short-distance travel this summer to save costs, he added.

A Vietnam Airlines spokesperson said demand is low globally and many airlines are offering discounts to boost sales.

Fuel prices have fallen by 38% year-on-year and this allows airlines to cut fares, the representative added.

A report by the Civil Aviation Authority of Vietnam said among aviation markets slow recovery is seen in China, Hong Kong and South Korea while only Thailand, Indonesia and Australia have made a strong recovery.

International transport declined by 20% in May and June from the same period in 2019.

In the first six months Vietnam saw the number of foreign arrivals fell by 26% from 2019 to 14.7 million.