JOINT CIRCULAR

GUIDELINES ON THE MANAGEMENT OF DOMESTIC AIRCRAFT CARGO AND PASSENGER FARES AND AIRPORT SERVICES IN VIETNAM

Pursuant to the Civil Aviation Law of Vietnam No. 66/2006/QH11 adopted by the National Assembly of the Socialist Republic of Vietnam at its 11th session, ninth meeting on June 29, 2006;

Pursuant to the Price Ordinance No. 40/2002/UBTVQH10 dated April 26, 2002;

Pursuant to Decree No. 77/2003/NĐ-CP dated July 1, 2003 of the Government stipulating the functions, tasks, powers, and organizational structure of the Ministry of Finance;

Pursuant to Decree No. 34/2003/NĐ-CP dated April 1, 2003 of the Government stipulating the functions, tasks, powers, and organizational structure of the Ministry of Transport;

Pursuant to Decree No. 170/2003/NĐ-CP dated December 25, 2003 of the Government detailing the implementation of certain provisions of the Price Ordinance;

The Ministry of Finance and the Ministry of Transport jointly issue guidelines on the management of domestic aircraft cargo and passenger fares and airport services as follows:

This technical regulation sets out technical requirements, testing methods, sampling procedures; management requirements; responsibilities of organizations and individuals producing, trading, and importing cigarettes.

1. Scope of application

These Circulars provide guidance on the principles for determining domestic air cargo and passenger fare prices (goods, passengers); airport service prices that are not within the scope of regulation of the Fees and Charges Ordinance; the authority and responsibilities of agencies and units in the establishment, submission, review of pricing plans, and determination of prices.

Thông tư này áp dụng đối với tổ chức, cá nhân có liên quan đến hoạt động kinh doanh đối tượng thủy sản nuôi chủ lực trên lãnh thổ Việt Nam.

These Circulars apply to organizations and individuals in Vietnam and foreign organizations and individuals (hereinafter referred to as units) permitted to supply and use air transportation services and airport services in Vietnam.

3. Currency for Payment

3.1. Briefly describe technical improvements, production processes, raw materials, designs; new technology applications such as automation, digitalization, clean technology; management, marketing, distribution solutions; products winning awards or certifications related to innovation…):…Domestic air cargo and passenger fare prices sold on the territory of Vietnam and airport service prices provided for domestic flights shall be specified in Vietnamese Dong (VND).

3.2. The price of domestic air cargo and passenger fares sold outside the territory of Vietnam and airport service prices provided for international flights shall be specified in United States Dollars (USD). In cases where payment is made in Vietnamese Dong, it shall be converted according to the average exchange rate on the inter-bank foreign exchange market published by the State Bank of Vietnam at the time of payment.

II. SPECIFIC PROVISIONS

1. Principles for Determining Domestic Air Cargo and Passenger Fare Prices and Airport Service Prices

In addition to implementing the Pricing Regulation for Assets, Goods, and Services issued together with Decision No. 06/2005/QĐ-BTC dated January 18, 2005 of the Ministry of Finance, units must comply with the following principles:

1.1. Domestic air cargo and passenger fare prices: shall be determined based on reasonable costs, consistent with service quality, supply and demand conditions, economic and social development policies during each period, and in line with the average price level of similar services in the ASEAN region.

1.2. Airport service prices:

a. Airport service prices for international flights (regardless of whether they are operated by domestic or foreign airlines): shall be determined based on reasonable costs, ensuring recovery of investment capital and accumulation for the unit, consistent with service quality, and the average price level of similar services in the ASEAN region.

b. Airport service prices for domestic flights: shall be determined based on reasonable costs, consistent with service quality and domestic market prices, taking into account the overall relationship between domestic and international prices of the same type of service, consistent with economic and social development policies during each period, and the average price level of similar services in the ASEAN region.

2. Authority and Responsibilities of Agencies and Units in Establishing, Submitting, Reviewing Pricing Plans, and Determining Prices

2.1. Ministry of Finance: Determine the prices and price ranges for the following services upon the proposal of the Ministry of Transport:

a. Price range for domestic economy class passenger transport fares (Class Y);

b. Service prices for takeoff and landing; air traffic control for departure and arrival; support for flight operations; security screening; passenger services;

c. Price range for some other monopoly-operated air services at airports, including:

- Aircraft parking service fees;

- Service fees for renting check-in counters||| - Baggage conveyor belt rental service fees;;

- Passenger boarding bridge rental service fees.

2.2. Ministry of Transport

The Civil Aviation Administration of Vietnam, an agency under the Ministry of Transport, acts on behalf of the Ministry of Transport to perform the following:

a. Direct and guide service-supplying units in formulating pricing plans and price ranges; organize the review of pricing plans and price ranges formulated by these units; officially submit written recommendations to the Ministry of Finance to determine prices and price ranges for services as stipulated in Clause 2.1, Point 2, Part II.

b. Guide units in implementing state-determined pricing decisions, pricing management regulations stipulated in this Circular, and related legal regulatory documents.

2.3. Service-supplying units

a. Formulate pricing plans and price ranges for air services, including domestic economy class passenger transport fare price ranges as stipulated in Clause 2.1, Point 2, Part II, and report to the Ministry of Finance and the Civil Aviation Administration of Vietnam.Pricing plans shall be calculated based on the principles set forth in Point 1, Part II of this Circular and the Pricing Regulation for Assets, Goods, and Services issued together with Decision No. 06/2005/QĐ-BTC dated January 18, 2005 of the Ministry of Finance. Pricing plan documentation shall be carried out in accordance with the annex attached to this Circular.

b. Determine specific service prices as stipulated in Clause a and c, Point 2.1, Part II of this Circular, in line with market conditions and within the price range determined by the Ministry of Finance. c. Determine the prices of air cargo and passenger transport fares and other air service prices not included in the list stipulated in Clause 2.1, Point 2, Part II of this Circular. d. Send the prices of air cargo and passenger transport fares and service prices of the unit to the Ministry of Finance and the Civil Aviation Administration of Vietnam at least 15 days before the effective date of the document (in lieu of a report).

The pricing plan is calculated based on the principles stipulated in Point 1, Section II of this Circular and the Pricing Regulation for Assets, Goods, and Services issued together with Decision No. 06/2005/QĐ-BTC dated January 18, 2005, of the Ministry of Finance. The pricing plan dossier shall be implemented in accordance with the annex attached to this Circular.

b/ Determine specific service prices as specified in Clause a and c, Point 2.1, Section II of this Circular, in line with market conditions and within the price range set by the Ministry of Finance.

c/ Determine air cargo transportation rates and other air service prices not included in the list specified in Clause 2.1, Point 2, Section II of this Circular.

d/ Submit the determined air cargo transportation rates and other service prices of the entity to the Ministry of Finance and the Civil Aviation Authority of Vietnam at least 15 days before the effective date of the document (in lieu of a report).

3. Adjusting state-set prices and procedures, deadlines for price determination: carried out in accordance with the provisions of Article 9 and Article 10 of Decree No. 170/2003/NĐ-CP dated December 25, 2003 of the Government detailing certain provisions of the Price Ordinance.

III. IMPLEMENTATION

1. Service providers

1.1. Implement air transport pricing regulations as guided in this Circular and related legal documents.

1.2. Display prices at transaction locations for buying and selling, providing services. For services with specific prices set by the State, display the prescribed prices accurately. For services with specific prices established within the State-prescribed price range or those within the service pricing authority of the entity, display according to the prices set by the entity.

1.3. In necessary cases, upon request from the Ministry of Finance or the Civil Aviation Administration of Vietnam, entities must prepare and submit reports on the implementation of air transport prices at their units. For units that are subsidiaries of the Vietnam National Aviation Corporation, reporting on the implementation of prices under this Circular shall be centralized through the Vietnam National Aviation Corporation.

2. Inspection and supervision of price implementation

The Ministry of Finance, the Ministry of Transport, and the Civil Aviation Administration of Vietnam organize independent inspections and supervisions or coordinate inspections and supervisions of compliance with price levels and State regulations on price management at entities; promptly handle violations according to current regulations.

IV. IMPLEMENTATION PROVISIONS

1. This Circular takes effect 15 days from the date of publication in the Official Gazette and replaces Circular No. 35/2005/TT-BTC dated May 12, 2005 of the Ministry of Finance guiding the management of prices for some specialized aviation services not included in the list of fees and charges.

2. During implementation, if there are difficulties, entities must report promptly to the Ministry of Finance and the Ministry of Transport for consideration and resolution.

Place of Receipt:
- Prime Minister, Deputy Prime Ministers (for reporting);
- Central Party Office and Party Committees;
- National Assembly Office;
- Office of the President;
- Government Office;
- Supreme People's Procuracy;
- Supreme People's Court;
- Ministries: Planning and Investment, Industry and Trade;
- Civil Aviation Administration of Vietnam;
- Vietnam Airlines Corporation; Pacific Airline;
- Vietnam Air Traffic Control Center, Three Airports Clusters;
- Official Gazette; State Audit of Vietnam;
- Government website;
- Legal Draft Inspection Department (Ministry of Justice);
- Archive: Ministry of Transport (Vehicles, Department of Transportation, Civil Aviation Administration of Vietnam), Ministry of Finance (Vehicles, Price Management Department, State Revenue Collection Department, Department of Taxation).

ANNEX

Implementing the provisions of Joint Circular No. 22/2007/TTLT-BTC-GTVT dated March 21, 2007 of the Ministry of Finance and the Ministry of Transport Guidelines on managing domestic air freight rates and airport service prices in Vietnam;

Based on national policies and current price levels, ... (name of the service provider requesting pricing or price adjustment)has developed a service pricing plan for ... and proposes the price level for ... (service name)/ price range ... (service name)... We respectfully request your review and comments to ensure the operation of production and business activities of ... (requesting unit)

(please attach the service pricing plan). Head of the unit requesting pricing(or price adjustment)

Domestic air freight rate for route ...

I. Summary table of costs for one trip (one way) Cost for one one-way flight

.......................................................................................................................

B737

III. Comparison with average prices of similar services in ASEAN countries: Create a comparison chart between the proposed adjusted rates and the domestic air freight rates of ASEAN countries (with comparable distances to the route being priced).

IV. Impact assessment of the proposed price: With the proposed price, the total revenue of the unit will increase (decrease)... billion VND/year (equivalent to ...%) compared to the current rate.

(air service provider).

Name of air service:

Domestic air freight rate for route ...

Raw material, fuel, and other material costs... ………………………………………………..

Depreciation of fixed assets:……………………………………………………..

Wages, social insurance, housing fund

2. Wages, social insurance 3. Depreciation of fixed assets

4. Other general expenses

6. Cost     

7. Profit

8. Service price (excluding VAT)

5. Other costs

9. Service price (including VAT)

10. Price range (including VAT)

III. Comparison of proposed prices with average prices of similar services in ASEAN countries:

Create a comparison chart between the proposed adjusted prices and the prices of similar services in ASEAN countries.

With the proposed price, the total revenue of the unit will increase (decrease)... billion VND/year (equivalent to ...%) compared to the current rate.

III. Compare the proposed price level with the average price level of the same service in ASEAN countries: Prepare a comparison table of the proposed adjusted price levels with the prices of similar services in ASEAN countries.

(air service provider).

With the proposed price level suggested by the entity, the total revenue of the entity will increase (decrease) by … billion VND/year (equivalent to …%).