Vietnam airlines face rising fuel costs, shortage risk amid Middle East tensions

Jet A1 fuel imported from Singapore rose to US$227.4 per barrel on Thursday, up 13.1 percent in a day, according to the Civil Aviation Authority of Vietnam.

Global oil prices have been volatile due to escalating conflict involving the U.S., Israel, and Iran in the Middle East since February 28 and concerns over supply disruptions through key shipping routes, with crude rising above $100 per barrel, according to industry data.

The authority warned of a possible shortage of aviation fuel from early April and in the following months, which could affect flight operations.

Vietnam Airlines said operating costs could double if fuel prices remain around $200 per barrel, adding pressure to already thin margins.

If shortages occur, airlines may have to cut frequencies, adjust schedules or cancel flights, the authority said.

Vietnamese carriers including Vietjet, Bamboo Airways, and Sun PhuQuoc Airways have not detailed plans for capacity adjustments.

An airline representative said companies are reviewing route networks and may prioritize more profitable routes while reducing less efficient services.

"If it is only a matter of higher prices, airlines can adjust fares or costs, but a real fuel shortage would directly affect operations," the person said.

The aviation authority has proposed support measures, including exempting environmental protection tax on aviation fuel through May 2026, adding aviation fuel to goods eligible for value-added tax reductions, and allowing flexible fuel surcharges.

It also proposed raising the cap on domestic airfares and cutting aviation fees such as takeoff, landing and air traffic control charges by 50 percent.