Lao Voices

Lao Airlines welcomes New Year with price hike

In the face of rising fuel prices, Lao Airlines is struggling to make a profit and has announced its intention to charge passengers more for domestic flights starting this month, according to company officials.

The company’s Deputy Director, Mr Ley Bounbandith, confirmed on Friday that the airline would raise prices by an average of 10 percent from the middle of April, coinciding with Lao New Year.

Mr Ley also said Lao passengers would be required to pay the same prices as foreigners for tickets on all sectors.

“We will now charge the same ticket price for everyone; there will be no discrimination as there was in the past,” he told Vientiane Times on Friday.

He said the increase in airfares was necessary because of the continuing rise in the price of fuel on the global market and was essential for the company to remain solvent.

But Mr Ley said the airline would not change ticket prices on international flights, saying the present rate was reasonable.

According to employees, Lao Airlines is considering increasing the price of international tickets but will not do so unless other airlines introduce price hikes, to keep its competitive edge.

The airline’s Marketing Manager, Mr Rada Sounthone, said this increase was in addition to the US$20 that was added to the cost of each round trip ticket at the end of last year, to enable the airline to operate a viable business.

Mr Rada confirmed the domestic flight price increase but could not give details about the changes in cost on each sector. He said prices on some sectors would remain the same.

Sectors carrying more passengers would see higher fare increases.

Mr Ley said he did not expect the move to have a negative impact on passenger numbers, explaining that most customers were business people and foreign tourists who could afford to pay the higher prices. He observed that there was a continuing high demand for seats on the airline.

The Director of Lao Air Service Company, Khemphone Phachanthavong, who runs a Vientiane ticketing agency, said that last year the price of fuel was about US$65 per barrel, but it now cost more than US$100 per barrel.

This increase had affected ticket prices on all international routes, with increases as much as 20 to 25 percent, although prices on some sectors had not changed.

He explained that airline operators were raising prices on more popular routes, using the profit gained on these sectors to subsidise those with lower passenger numbers.

Although passengers were paying more for tickets with Lao Airlines, this had not led to a drop in sales, he said.

By Ekaphone Phouthonesy
April 6, 2008
Vientiane Times - Vientianetimes.org.la