HCMC – Vietnamese air carriers will restructure their flight networks and supply capacity starting April this year to offset surging Jet A-1 fuel prices and maintain operational efficiency.
The Civil Aviation Authority of Vietnam (CAAV) announced that carriers are planning to reduce frequencies or suspend underperforming domestic routes, specifically those with low load factors during off-peak hours, while prioritizing key hubs like Hanoi, Danang and HCMC.
This pivot comes as the CAAV urgently petitions the Government for emergency support measures. Key proposals include a flexible fuel surcharge mechanism for domestic economy fares, extending the null import duty and further slashing the environmental protection tax on jet fuel from VND1,500 to VND1,000 per liter to ease cash flow pressures on struggling carriers.
The industry is facing a severe double squeeze from both price and supply. Driven by the ongoing Middle East conflict, the average price of Jet A-1 hit US$234.34 per barrel on March 24, with physical premiums peaking at US$40 per barrel. Rising refining costs and war risk insurance have further inflated total fuel expenditures, which are projected to remain at record highs.
Supply stability is also under threat as major regional exporters like Thailand and China limit shipments to prioritize domestic needs. Currently, Vietnam’s aviation fuel supply relies 80% on imports from Singapore, China and Thailand, with only 20% locally sourced from the Dung Quat and Nghi Son refineries.
While major suppliers like Skypec and Petrolimex Aviation have committed to meeting demand through mid-April, the CAAV warns that securing fuel beyond that period remains uncertain and may require purchasing at exorbitant spot prices.
