HCMC – The Ministry of Construction has tasked the Civil Aviation Authority of Vietnam (CAAV) with examining options to either raise the cap on domestic airfares or introduce a fuel surcharge to support airlines as Jet A-1 prices surge.
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The CAAV is required to conduct a thorough evaluation of both approaches. In particular, any proposed fuel surcharge, which would sit outside the fare cap, must have its legal basis, regulatory authority, and calculation method clearly defined.
CAAV is also asked to review the current cap on domestic airfares, evaluate airlines’ operating performance following the rollout of support policies, and assess the pros and cons of each option as well as their potential impact on the consumer price index.
It must also clearly determine whether the proposed fuel surcharge includes value added tax.
The CAAV must coordinate with airport operators and air navigation service providers to formulate plans to cut takeoff, landing, and air traffic control charges, helping ease input costs for airlines.
Earlier, the Government and relevant ministries and agencies had introduced various measures to ease cost pressures, including adjusting preferential import tariffs on fuel and developing plans to reduce or waive fees and charges in the transport sector.
These measures have helped support businesses, but they have not been sufficient to offset costs as fuel prices continue to rise.
Jet A-1 fuel prices have risen recently, largely due to sharp fluctuations in global crude oil prices, with additional pressure from tensions in the Middle East.
At the same time, a rapid recovery in air travel demand has intensified supply and demand pressures. Combined with higher transportation and storage costs, this has pushed fuel prices upward, directly increasing airlines’ operating costs.
