Airline catering services in Vietnam may soon have to pay VND75,000 – 100,000 (US$3.3 – 4.41) per ration served under a proposed circular on franchising prices of aviation services.

The draft regulation, submitted by the Ministry of Transport to the government for review, looks to set a new price bracket for the franchising of a number of aviation services, including the preparation of airline meals.

Typically, airlines do not prepare the in-flight meals themselves, but entrust the task to a specialist air catering service, which pays a fixed amount of money per ration of airline meal served – known as franchising price – to airport authorities in order to operate.

The same rule applies to other franchised services such as supply of airplane fuel and operation of terminals, cargo warehouses and hangars.

Under the new regulation, the franchising price for airline meals range from VND75,000 ($3.3) to VND100,000 ($4.41) per ration.

To operate an international terminal, businesses must pay between 3.5 – 7 percent of their VAT-excluded revenue, while the price to operate cargo warehouses is set at 1.5 – 2 percent of revenue.

Meanwhile, suppliers of airplane fuel are charged $1.2 – 1.5 per metric tons of fuel sold, according to the draft circular.

Speaking with Tuoi Tre (Youth) newspaper on Saturday, a leader of an airline catering service company said such a high price bracket would pose a challenge for service providers if imposed.

According to the leader, current airline meals, such as those sold on Vietjet flights, are still struggling to sell despite being priced at only around VND50,000 ($2.2) per ration.

With the costs being raised to up to VND100,000 per ration, he said, companies would be faced with two tough choices – of whether or not to continue serving meals on some low-demand flights – that hurt their business either way.

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