Vietnam Sets New Compensation Caps for Canceled, Delayed Flights

Vietnam's Ministry of Transport has implemented new regulations for passenger compensation in cases of flight cancellations and delays, effective July 1. Under the new mandates, airlines are required to provide compensation of up to VND4.4 million ($165) for passengers affected by flight delays or cancellations due to airline fault. The stipulations, outlined in Circular 48 issued by the Ministry of Transport to implement Decree 208/2026, aim to standardize and enhance passenger rights. If a flight is delayed by at least four hours or canceled due to the airline's fault, passengers who decline alternative flight options are entitled to a full refund or a refund for any unused portion of their ticket. The refund process begins once a passenger submits a valid request. Airlines must complete refunds within 14 days for vouchers, 21 days for cash or bank transfers, and 45 days for credit card payments. For tickets purchased through travel agents, airlines must refund the agent within 30 days, and the agent then has 25 days to return the money to the passenger. Passengers have a 60-day window to file refund requests from the scheduled departure date for canceled flights or the actual departure date for delayed flights. For other cases, the total processing time cannot exceed 60 days from receiving all required documents. Compensation for domestic flights is tiered by distance: VND220,000 ($8.37) for routes under 500 kilometers, VND330,000 for routes between 500 km and 1,000 km, and VND440,000 for routes of 1,000 km or longer. International flight compensation follows a similar structure: $28 for routes under 1,000 km, $55 for routes between 1,000 km and 2,500 km, $88 for routes between 2,500 km and 5,000 km, and a maximum of $165 for routes of 5,000 km or more. If a flight is delayed by four hours or more and is subsequently canceled, passengers will receive only a single compensation payment. Airlines can offer payouts via cash, bank transfer, electronic payment, frequent flyer points, complimentary tickets, or vouchers, provided that any alternative payout equals the prescribed cash value and does not come with "unreasonable usage conditions." Passengers can submit claims at the airport, airline ticket offices, or online within 90 days of the scheduled flight. Airlines are mandated to resolve claims within 21 days of receiving a valid request and provide written explanations for rejections. They must also publish claim procedures on their websites, respond to complaints in writing within seven days, and submit regular reports on flight disruptions and denied boardings. This new regulation is part of a broader effort to strengthen consumer protection within Vietnam's one-party system. As Vietnam continues its rapid economic growth, air travel demand has surged, making the management of related issues a growing concern. Maintaining a stable international aviation network is crucial for facilitating economic activities, particularly given Vietnam's close ties with China.