National flag carrier Vietnam Airlines increases airfares on domestic flights from January 1, 2010.

Airfares of economy class are raised by between VND14,000 (76 U.S. cents) and VND81,000 ($4.4) as Vietnam Airlines imposes the value added tax of 10 percent instead of five percent as present.

As a result, a number of travel firms have also announced to raise their tour fees this year.

The Value Added Tax Law, which took effect on January 1, 2009, regulates the VAT of 10 percent on airfares.

However, the Ministry of Finance did not give any guidance for the implementation of the law. Vietnamese air carriers thus decided to keep the five percent rate last year.

Vietnam Airlines estimated its revenue for 2009 would reach nearly VND23.74 trillion (US$1.28 billion), with pre-tax profit of VND150 billion ($8.12 million).

But the figures are lower than previous year’s earnings of VND26.6 trillion and VND240 billion, respectively, in a report the airline released in 2008.

The airline’s chief executive officer Pham Ngoc Minh told the Saigon Times Daily 2010 would be an important year for the carrier to carry out its strategy to become one of the leading airlines in the region in the 2010 – 2050 period.

He said the airline, to become a member of global airline alliance SkyTeam in 2010, would also add 16 new aircrafts into its current fleet of 58 airplanes next year.

The country’s largest airline, which has targeted to serve 11 million passengers next year, plans to expand its aircraft fleet to 104 in 2015 and 150 in 2020.

Tuoi tre Online