JOINT CIRCULAR No.171/1998/TTLT BVG-CAAV OF FEBRUARY 7, 1998 ON MANAGEMENT OF PRICES IN THE VIETNAM CIVIL AVIATION SERVICE

Pursuant to the Law on Vietnam Civil Aviation of 1991 and the Law on Amendments and Supplements to a Number of Articles of the Law on Vietnam Civil Aviation of 1995;

Pursuant to Decree No.1-CP of January 5, 1993 of the Government on the tasks, powers and organization of the apparatus of the Government Price Commission;

Pursuant to Decree No. 68-CP of October 25, 1995 of the Government on the functions, tasks, powers and organizational structure of the apparatus of the Vietnam Civil Aviation Administration;

Pursuant to Decision No.137-HDBT of April 24, 1992 of the Council of Ministers (now the Government) on management of prices;

Pursuant to Decision No.818-TTg of December 13, 1995 of the Prime Minister on the management of Vietnam civil aviation transport charge;

The Head of the Government Price Commission and the Head of the Vietnam Civil Aviation Administration here below provide the following regulations on the State management mechanism of prices in the Vietnam Civil Aviation service:

I. GENERAL PROVISIONS

1. Prices in the Vietnam Civil Aviation Service (hereafter called aviation prices) are the prices of the air and non-air services supplied by the entities and legal persons operating and doing business in the domain of aviation (hereafter called "units") to passengers, airlines, individuals, organizations and enterprises using these services (hereafter called service users). Aviation prices comprise the following types:

1.1- Air freight transport charge including transport charge of passengers, merchandises, air mails, air packages on international and domestic routes, chartered service flights in service of the national economy, special flights. These shall be managed according to Circular No.904-CAAV of May 6, 1996 of the Vietnam Civil Aviation Administration guiding the implementation of Decision No.818-TTg of December 13, 1995 of the Prime Minister.

1.2- The other types of price in the Aviation Service shall be managed according to the regulations of this Circular.

2. To promote the activities of the Aviation Service, the aviation prices shall be established on the basis of reasonable expenditures, allowing for the possibility of recovering the investment and creating accumulation. At the same time they shall have to conform with the price rate of the countries in the region and step by step to carry out the recommendations of ICAO in the domain of prices.

The aviation prices must also be formed on the basis of the regimes and policies of the State in the domain of aviation; ensure harmony of the interests of the units and the customers. It is forbidden to raise prices unreasonably on the strength of the monopolistic character in business.

3. With regard to the types of business and service of a high monopolistic character directly related to the use of the infrastructure of the Civil Aviation Service or directly influencing the users of the air transport services and transporters running air transport activities in the Vietnamese territory, the State manages prices through the setting of different types of prices or determining the principles of setting prices and price frames of these kinds of service.

With regard to other types of business and service: the units shall set prices according to the market mechanism, but they are banned from misusing their monopolistic position or monopolistic alliance position to raise prices and force prices on customers, and they shall have to submit to the common management of prices by the competent agencies as stipulated in this Circular.

II. COMPETENCE IN PRICE SETTING

1. The Government Price Commission: on the basis of written proposals of the Vietnam Civil Aviation Administration, the Government Price Commission shall examine and assign to the Vietnam Civil Aviation Administration the task of setting the following types of price:

1.1- Price of sending airplanes to and from.

1.2- Price of service to air passengers at the aviation airports.

1.3- Price of landing and taking off of airplanes.

2. The Vietnam Civil Aviation Administration:

2.1- To work out or to guide the units to work out plans and examine and integrate the plans and propose the Government Price Commission to examine the types of price defined in Article 1, Part II.

2.2- On the basis of the practical situation or at the proposal of the units, the Vietnam Civil Aviation Administration shall consider, examine and set the following types of price:

2.2.1- Price of aviation safety scanning.

2.2.2- Price of leasing stands for filling passenger procedures at the aviation airports.

2.2.3- Price of car parking at the aviation airports.

2.2.4- The price of assigning the right of exploitation at the aviation airports.

2.2.5- Price of subscription at the aviation airports.

2.2.6- Price of supplying supplementary service in directing transit flights.

2..2.7- Price of using the aircraft parking area.

And a number of other types of price arising in the process of activity of the units but this must necessarily be closely managed and defined in order to ensure the good implementation of the policies of the State in the business of the various types of aviation services.

2.3- The Vietnam Civil Aviation Administration: basing itself on the practical situation or at the proposal of the units it shall:

2.3.1- Lay down the principles to set prices for the following types:

2.3.1.1- Price of supplying gasoline and lubricant for aircraft.

2.3.2- Lay down the frame for the following prices:

2.3.2.1- Price of cooling the brakes and cleaning the aircraft tyres.

2.3.2.2- Price of hiring cars and other ground means at the aviation airports.

2.3.2.3- Price of renting level ground for advertizements at the aviation airports.

2.3.2.4- Price of renting level ground at the aviation airports.

2.3.2.5- Price of providing ground technical and commercial services for the aircraft.

2.3.2.6- Price of storaging airborne goods in the warehouses or on the yard.

2.3.2.7- Price of hauling aircraft.

2.3.2.8- Price of directing aircraft.

2.3.2.9- Price of renting aircraft ramps.

2.3.2.10- Price of using baggage belts at the aviation airports.

2.3.2.11- Price of transport business in the parking area of the aviation airport.

2.3.2.12- A number of non-aviation prices of the direct services in using the infrastructure of the local airport (not an international airport).

And a number of other prices arising in the process of the activities of the units but these must be controlled in terms of the principles of setting the prices or price frames.

3. For the units:

3.1- Proceeding from market requirements and on the basis of complying with the principles or price frame defined by the Vietnam Civil Aviation Administration, the units shall set concrete prices for the various types of price stated in Section 2.3 above.

3.2- On the principle of setting prices according to the market mechanism, but they are banned from misusing their monopolistic position or monopolistic alliance position to raise prices and force prices on customers, the units shall set the following types of price:

3.2.1- Price for guarding aircraft.

3.2.2- Price of guarding bicycles and motorbikes at the airports.

3.2.3- Price of using the sending-off house at the airports.

3.2.4- Price of supplying equipment and services in booking and ticket selling for air transport.

3.2.5- Price of other services and commercial and business prices supplied by the units.

3.3- In case new kinds of service arise which are not yet concretely specified in this Circular, the unit shall be allowed to temporarily apply the price rate agreed with the customers or the price rate stipulated by the unit. Within 30 days after applying the temporary prices, the unit must work out the draft prices or price frame and submit it to the Vietnam Civil Aviation Administration and the Government Price Commission for consideration and decision (except for the types of price mentioned in Section 3.2 above).

III. OTHER REGULATIONS

1. Registration of aviation prices:

1.1- The units have the responsibility to register with the Vietnam Civil Aviation Administration the types of aviation prices stated in Point 3, Part II (except the types stated in Section 3.2.5):

1.1.1- Periodical registration: this shall be carried out annually (on the days prior to the 1st of February each year) for the types of price planned for application in the subsequent period.

1.1.2- Ordinary registration: The new price rates must be registered 15 days at the latest before the date of official application, except for the types of price stipulated by the Aviation Administration (prices stated in Sections 1 and 2.2 Part II).

1.2- The main contents to be registered are: name, subjects of application, price rate or price frame applied in the registration period, the cases of special application, the relevant annotations and notices, explanations of the method of elaboration and the component parts of the registered types of price (in case of new charges, changes and supplements compared to the earlier period). If in the registration period there is no change compared to the earlier period in the types of price or in a number of contents of the prices, the unit shall have only to repeat the names of the types of price and the annotation "As in 19.... (the year prior to the year of registration)".

1.3- In the process of implementation, proceeding from the requirements of reality, the units are allowed to adjust the price increases or decreases of no more than 5% compared with the price rate or price frame already registered. In case of bigger changes, the units shall have to re-register the said type of price before applying the new price rate as prescribed in Section 1.1.2 above.

In case of changes of other contents such as name, subjects of application, special cases... the unit shall have to re-register these contents right during the application of the new contents.

2. Consultation on aviation prices:

2.1- In case of dispute concerning the types of price mentioned in Point 3, Part II, the units or the users of service are entitled to propose the organization of consultation on prices. The chairing agency of this consultation is the Vietnam Civil Aviation Administration (with the participation of the Government Price Commission).

2.2- In case the sides cannot agree on the price rates through consultation, the Vietnam Civil Aviation Administration shall decide the price rate to be applied. The sides shall have the obligation to carry out this decision.

3. Checking the implementation of aviation prices:

3.1- The Vietnam Civil Aviation Administration and the Government Price Commission shall organize either independently or jointly the check of the implementation of the prices and price frames of aviation at the units; shall handle in time the violations of the current prescriptions; supplement or change in time the prices or price frames which are no longer appropriate.

3.2- The units shall have the responsibility to report the implementation of the aviation prices to the Vietnam Civil Aviation Administration periodically every year (in the same period of the annual price registration) with regard to the types of price mentioned in Part II above, except the types of price mentioned in Section 3.2.5.

In case of necessity and at the request of the Government Price Commission or the Vietnam Civil Aviation Administration, the unit shall have to make an irregular report on the implementation of the aviation prices concerning all the types of price already mentioned in this Circular.

3.3- The content of the reports must reflect the implementation of prices in the reporting period at the units, the rational and irrational points, the suggestions for amendment and modification and other contents at the request of the Vietnam Civil Aviation Administration and the Government Price Commission.

3.4- With regard to the aviation prices related to the services of the enterprises members of the Vietnam Airlines, the registration of prices and the reports on the implementation of prices as prescribed in this Circular shall be conducted in a concentrated and unified manner through the Vietnam Airlines.

3.5- Each year, on the basis of the registrations and reports on the implementation of the prices at the units, the Vietnam Civil Aviation Administration shall have to report on the implementation of the types of price mentioned in Sections 1 and 2.2 Part II to the Government Price Commission for coordination in management.

IV. IMPLEMENTATION PROVISIONS

1. This Circular takes effect from the date of its signing. The earlier provisions which are contrary to this Circular are now annulled.

2. In the course of implementation, should any question arise, the units would report in time those questions which need supplementation or modification to the Government Price Commission and the Vietnam Civil Aviation Administration for consideration and settlement.

Head of the Vietnam Civil Aviation Administration

NGUYEN HONG NHI

Head of the Government Price Commission

NGUYEN NGOC TUAN