Circular No. 36/2015/TT-BGTVT on Management of Domestic Air Freight Service Prices and Airline Industry Service Prices

CIRCULAR

Regarding the management of domestic air transportation service prices and specialized aviation service prices.g

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Pursuant to the Civil Aviation Law of Vietnam No. 66/2006/QH11 dated June 29, 2006, and the Law Amending and Supplementing Certain Provisions of the Civil Aviation Law of Vietnam No. 61/2014/QH13 dated November 21, 2014;

Pursuant to the Law on Prices No. 11/2012/QH13 dated June 20, 2012;

Pursuant to Decree No. 149/2016/NĐ-CP dated November 11, 2016 of the Government amending and supplementing certain provisions of Decree No. 177/2013/NĐ-CP dated November 14, 2013 of the Government detailing and guiding the implementation of certain provisions of the Law on Prices;

Pursuant to Decree No. 107/2012/NĐ-CP dated December 20, 2012 of the Government stipulating the functions, tasks, powers, and organizational structure of the Ministry of Transport;

stipulating on air cargo transportation and common aviation activities (hereinafter referred to as Circular No. 81/2014/TT-BGTVT dated December 30, 2014), Circular No. 14/2015/TT-BGTVT dated April 27, 2015 issued by the Minister of Transport

The Minister of Transport issues this Circular on the management of domestic air transportation service prices and specialized aviation service prices.

PART I

GENERAL PROVISIONS

Article 1. Scope of Regulation and Applicability

1. This Circular provides guidance on the principles for determining domestic air transportation service prices and specialized aviation service prices; the authority and responsibility of agencies and units in formulating, appraising pricing plans, and deciding on prices and price declarations.

2. This Circular applies to organizations and individuals providing, using, and managing domestic air transportation service prices and specialized aviation service prices.

Article 2. Currency for Payment

1. Domestic air transportation service prices sold within the territory of Vietnam and specialized aviation service prices provided for domestic flights shall be specified in Vietnamese Dong (VND).

2. Domestic air transportation service prices sold outside the territory of Vietnam shall be specified in local currency or freely convertible currency in accordance with the regulations of that country.

3. Specialized aviation 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 provisions of the law on foreign exchange.

Article 3. Principles for Determining Service Prices

1. General principles for domestic air transportation service prices and specialized aviation service prices:

a) Service prices shall be determined based on reasonable actual production and business costs; they must be commensurate with the quality of services and market supply and demand conditions;

b) Price levels must align with economic and social development policies during each period and be consistent with the price level of similar services in the ASEAN region;

c) Service prices must ensure competitiveness and prevent abuse of monopoly positions.

2. In addition to the general principles stipulated in Clause 1 of this Article, organizations and individuals providing specialized aviation services must comply with the following principles:

a) Air service prices for international flights shall be determined based on ensuring the recovery of investment capital, creating accumulations for the unit, being appropriate to production volume and scale of investment; allowing the application of pricing methods to enhance the quality of services provided at airports;

b) Air service prices for domestic flights shall be determined based on domestic market prices, taking into account the relationship between domestic and international prices for the same type of service;

c) Non-airport service prices at airports and airfields shall be implemented on a non-monopoly basis, in line with market conditions, ensuring customer benefits, and in compliance with legal provisions on pricing.

Article 4. Preferential Pricing Policies to Encourage and Expand Service Users

1. Preferential pricing policies shall be developed and promulgated based on ensuring transparency, public disclosure, and non-discrimination among users of the same type of service.

2. The competent pricing authority shall establish preferential pricing policies for specific state-priced services provided by state-owned enterprises.

3. Organizations and individuals providing services shall proactively develop and promulgate their own preferential pricing and discount policies.

Chapter II

SPECIFIC PROVISIONS

Section 1

PRICING

Article 5. List of services to be priced or have price ranges determined by the Ministry of Transport

1. Deciding the level of prices for aviation services, including:

a) Take-off and landing services;

b) Air traffic control services for departure and arrival;

c) Services supporting air operation activities;

d) Passenger service;

đ) Aviation security assurance services;

e) Air traffic control services for flights passing through airspace managed by Vietnam;

2. Deciding the price range for domestic economy class passenger transport services sold within the territory of Vietnam on routes operated by enterprises with a monopoly position, enterprises, or groups of enterprises with a dominant market position;

3. Deciding the price range for some aviation services provided by enterprises with a monopoly position, enterprises, or groups of enterprises with a dominant market position at airports, including:

a) Aircraft parking area rental services;

b) Passenger check-in counter rental services;

c) Baggage conveyor belt rental services;

d) Aisle bridge rental services for boarding and deplaning passengers;

đ) Full-service ground commercial technical support services at airports (for airports still applying the full-service model);

e) Automatic baggage sorting services;

g) Aviation fuel loading services;

h) Services using underground infrastructure systems for fuel supply at airports;

4. Deciding the price range for some non-aviation services:

a) Rental services of floor space at passenger terminals, cargo terminals;

b) Essential basic services at passenger terminals.

Article 6. Procedures for establishing and reviewing pricing proposal files

1. Organizations and individuals providing services shall prepare two sets of pricing proposal files and submit them to the Civil Aviation Authority of Vietnam via one of the following methods:

a) Direct delivery;

b) Sending via official correspondence;

c) Sending via email with electronic signature or scanned form with signature and red seal, or sending via fax and making a phone call to notify, while also sending via official correspondence.

2. The pricing proposal file includes:

a) A letter requesting pricing or price adjustment;

b) Pricing plan;

c) Other related documents.

The pricing proposal file specified in Appendix 1 issued together with this Circular.

3. Time limit for reviewing the pricing proposal and time limit for deciding the price:

a) Within a maximum of 15 working days from the date of receipt of complete pricing proposal files as prescribed, the Civil Aviation Authority of Vietnam shall provide written comments on the content of the pricing plan.

In case the pricing proposal file is incomplete, within three working days, the Civil Aviation Authority of Vietnam shall issue a written request for organizations and individuals to complete the file. The review period will be calculated from the date of receiving the complete file as prescribed.

b) Within a maximum of ten working days from the date of receipt of the pricing plan with comments from relevant agencies and the review document of the Civil Aviation Authority of Vietnam, the Ministry of Transport shall decide the price. If no decision is made, the Ministry of Transport shall provide a written response.

c) In cases where it is necessary to extend the review period for the pricing plan and the decision-making period, the Civil Aviation Authority of Vietnam or the Ministry of Transport must notify in writing and specify the reasons for the extension to the organizations and individuals submitting the pricing plan; the extended period shall not exceed fifteen working days from the expiration date of the review and decision-making periods stipulated in points a and b of this clause.

4. Adjusting the price level:

a) When factors forming domestic and international prices fluctuate affecting business operations, the Ministry of Transport shall promptly review and adjust the prices;

b) Organizations and individuals have the right to request the Ministry of Transport to adjust the price levels according to the provisions of the law. When requesting the Ministry of Transport to adjust the price level, organizations and individuals must clearly state the reasons and basis for determining the proposed adjusted price level;

c) The procedures and time limits for adjusting prices shall be carried out in accordance with the provisions of paragraphs 1, 2, and 3 of this Article.

Section 2

PRICE DECLARATION

Article 7. List of services for price declaration

1. The services prescribed in Clause 2 and Clause 3 of Article 5 of this Circular.

2. Air transport services within the pricing authority of organizations and individuals providing such services, including:

a) Domestic cargo and mail transportation services;

b) Ground commercial technical service (excluding services provided under bilateral or multilateral cooperation contracts);

c) Cargo handling services at airports;

d) Use of equipment in terminals;

đ) Other services at airport areas.

Article 8. Method of Price Declaration

1. Five working days prior to implementing the declared price, organizations and individuals providing services shall prepare two sets of price declaration files to be sent to the Civil Aviation Administration of Vietnam through one of the following methods:

a) Direct delivery;

b) Sending via official correspondence;

c) Sending via email with electronic signature or scanned form with signature and red seal, or sending via fax and making a phone call to notify, while also sending via official correspondence.

2. The price declaration file includes:

a) A document from the organization or individual specifying the time period and validity of the declared price level along with accompanying documents;

b) A table detailing specific price levels.

The price declaration file specified in Appendix 2 issued together with this Circular.

3. Price declaration shall not be implemented in the following cases:

a) Increasing prices within 5% compared to the immediately preceding declared price level without exceeding the maximum price set by regulations;

b) Decreasing prices within 10% compared to the immediately preceding declared price level without falling below the minimum price set by regulations.

4. In case of increasing prices beyond 5% or decreasing prices below 10% compared to the immediately preceding declared price level, organizations and individuals must declare the price according to the regulations.

Article 9. Procedure for Acceptance and Review of Price Declaration Files

1. Acceptance procedure:

a) Upon receipt of the price declaration file, the Civil Aviation Administration of Vietnam records the date of receipt and stamps the declaration file according to administrative procedures, while returning one copy of the file to the declaring organization or individual;

b) If the price declaration file is incomplete as required, within two working days, the Civil Aviation Administration of Vietnam will notify in writing requesting the organization or individual to complete the file;

c) After five working days from the date of receiving a complete price declaration file, if the Civil Aviation Administration of Vietnam does not request the organization or individual to explain or supplement the contents or components of the file, the organization or individual may implement the declared price.

2. Review procedure:

Follows the review process stipulated in Clause 2 of Article 16 of Circular No. 56/2014/TT-BTC dated April 28, 2014, issued by the Minister of Finance on guiding the implementation of Decree No. 177/2013/NĐ-CP dated November 14, 2013, of the Government detailing and guiding the implementation of certain provisions of the Law on Prices.

Section 3

TENDERING OF NON-AIRPORT SERVICES AND PUBLIC DISCLOSURE OF PRICES

Article 10. Tendering for Non-Airport Services Supply

1. When not self-exploiting or using land, supplying services, enterprises providing passenger terminal and cargo terminal operations must organize tenders to select organizations and individuals to lease land and supply non-airport services.

2. The procedures and formalities for tendering shall be carried out in accordance with the laws on tendering.

Article 11. Price Display

Organizations and individuals providing services shall implement the display of non-airport service prices in accordance with Articles 17 and 18 of Decree No. 177/2013/NĐ-CP dated November 14, 2013, of the Government detailing and guiding the implementation of certain provisions of the Law on Prices.

Article 12. Public announcement of prices

Organizations and individuals providing services shall perform:

1. Announce publicly the prices of domestic air transportation services and specialized aviation services to users before providing the service or before signing a service provision contract.

2. Publicly announce and send written documents to competent state agencies regarding preferential pricing policies within the unit's authority.

Section 4

RESPONSIBILITIES OF STATE MANAGEMENT ORGANIZATIONS AND ORGANIZATIONS AND INDIVIDUALS PROVIDING SERVICES IN IMPLEMENTING SERVICE PRICES

AND ORGANIZATIONS AND INDIVIDUALS SUPPLYING SERVICES IN THE IMPLEMENTATION OF SERVICE PRICING

Article 13. Responsibilities of state management agencies

1. The Ministry of Transport:

a) Decide on prices and price ranges for services specified in Article 5 of this Circular;

b) Organize inspections and checks on compliance with laws and regulations on prices, promptly handle violations according to regulations.

2. Vietnam Civil Aviation Authority:

a) Guide organizations and individuals providing services to implement price management regulations as directed in this Circular and related legal normative documents;

b) Announce and post lists of domestic routes, lists of organizations and individuals required to declare prices for domestic air transportation services and specialized aviation services on the Vietnam Civil Aviation Authority’s website;

c) Inspect and check compliance with laws and regulations on prices within its authority.

3. Airports Control Units:

a) Regularly inspect, supervise, and urge organizations and individuals providing non-aviation services at airports to comply with price regulations;

b) Inspect and check compliance with laws and regulations on prices within its authority.

Article 14. Responsibilities of organizations and individuals providing services

1. Implement price management regulations as directed in this Circular and other related legal normative documents.

2. Prepare and submit reports on the implementation of domestic air transportation service prices and specialized aviation service prices as required by competent state agencies.

3. Comply with inspection and check decisions made by competent state management agencies.

Chapter III

IMPLEMENTING PROVISIONS

Article 15. Effective Date

"Article 10

Joint Circular No. 103/2008/TTLT/BTC-BGTVT dated November 12, 2008, issued by the Minister of Finance and the Minister of Transport guiding the management of domestic air transportation fare rates and airport service prices in Vietnam, and Joint Circular No. 43/2011/TTLT/BTC-BGTVT dated March 28, 2011, amending and supplementing Joint Circular No. 103/2008/TTLT/BTC-BGTVT dated November 12, 2008, cease to be effective from October 1, 2015.

Article 16. Transitional Provisions

1. Price levels and price ranges for aviation services stipulated in Decision No. 1992/QĐ-BTC dated August 15, 2014, issued by the Minister of Finance on setting price levels and price ranges for certain aviation services at Vietnamese airports; The price range for domestic economy class passenger transport fares stipulated in Decision No. 3282/QĐ-BTC dated December 19, 2014, issued by the Minister of Finance on the maximum price range for domestic economy class passenger transport fares on monopoly routes will continue to be applied until a document from the Minister of Transport on domestic air transportation service prices and specialized aviation service prices is issued.

2. Organizations and individuals leasing premises and providing non-aviation services at airports shall continue to fulfill the terms of their contracts signed with the service provider enterprises operating passenger terminals and cargo terminals until the end of the contract term but not later than December 31, 2016. From January 1, 2017, or after the contract expires (for contracts expiring before December 31, 2016), the service provider enterprises operating passenger terminals and cargo terminals shall organize bidding to select organizations and individuals leasing premises and providing non-aviation services in accordance with Clause 10 of this Circular.

Article 17. Implementation Organization

The Director of the Ministry's Office, the Director of the Ministry's Inspectorate, the Heads of Departments, the Director of the Vietnam Civil Aviation Authority, the Heads of relevant agencies, organizations, and individuals are responsible for implementing this Circular.