HCMC – Vietnam’s aviation authority has proposed allowing airlines to impose a fuel surcharge on domestic flights as jet fuel prices remain elevated, in a move aimed at easing cost pressures on carriers.
The Civil Aviation Authority of Vietnam (CAAV) has submitted the proposal to the Government, describing the surcharge as a temporary and flexible measure to help share rising costs between airlines and passengers amid volatile global oil prices driven by geopolitical tensions.
Jet A-1 prices in Asia have seen sharp fluctuations in recent months. According to the International Air Transport Association, prices in early April peaked at US$228.21 per barrel, more than double the baseline of US$90 per barrel that airlines typically use for financial planning. Prolonged high fuel costs are weighing on operations and growth prospects of Vietnam’s aviation sector.
Under the proposal, the surcharge mechanism would be modeled on Japan’s approach. It would be triggered when Jet A-1 prices reaches US$100 per barrel, with adjustments made in increments of US$10 per barrel. The surcharge would apply to basic economy-class tickets on domestic routes for a period of three months.
For example, the proposed surcharge on the Hanoi – HCMC route is around VND311,000 per leg, significantly lower than the roughly VND1.1 million charged on routes of similar duration in markets such as Japan and South Korea.
The CAAV said the mechanism would fall under the Government’s authority and is intended to provide a flexible response to market conditions. It aims to support airlines’ cash flow while balancing the interests of the State, businesses, and passengers, and to avoid sharp fare increases without corresponding adjustments when fuel prices decline.
