HCMC – The Civil Aviation Authority of Vietnam (CAAV) has proposed adding a fuel surcharge to domestic air tickets to help airlines cope with rising Jet A-1 fuel prices and possible supply disruptions, the Government news portal baochinhphu.vn reported.
The aviation regulator suggested applying a flexible surcharge mechanism linked to Jet A-1 fuel price movements.
CAAV also proposed exempting jet fuel from the environmental protection tax until the end of May. It recommended adding jet fuel to the list of goods eligible for a lower value-added tax rate, instead of the current 10%.
It proposed adjusting ticket price caps on domestic air routes if necessary to help airlines maintain operations.
To secure fuel supply, CAAV called for high-level discussions with countries that have imposed export restrictions on aviation fuel, including Thailand and China. The move aims to allow Vietnamese companies to carry out existing Jet A-1 fuel contracts and seek additional supply.
The authority also recommended cutting some aviation service charges by 50%, including landing and air navigation fees, similar to support measures applied during the Covid-19 pandemic.
CAAV proposed that the Ministry of Finance study further tax and fee support policies. It also asked the State Bank of Vietnam to consider increasing credit limits and providing guarantees for letters of credit for jet fuel suppliers to help secure supply and support airlines’ operations.
The Ministry of Industry and Trade was urged to diversify fuel supply sources and instruct domestic refineries, including Dung Quat and Nghi Son, to maximize Jet A-1 production.
According to the International Air Transport Association, the Jet A-1 price spike could lead to airlines’ operating costs surging by 50% to 60%. If the oil price reaches US$200 per barrel or higher, carriers’ operating costs could climb by more than 70%.
