Vietnam's airline operating costs have surged by 60-70% following a tripling of jet fuel prices due to the ongoing conflict in the Middle East. The Civil Aviation Authority of Vietnam (CAAV) reported that jet fuel prices have hovered around US$200 per barrel as of March 9, sharply increasing expenses for airlines operating within and through Vietnam.
Vietnam Airlines, the nation's largest airline, has stated that if fuel prices persist at this elevated level, its costs could double, threatening profitability. The disruption has already impacted major transit routes linking Europe and Asia, with carriers such as Qatar Airways, Emirates, and Etihad Airways canceling or adjusting flights, affecting approximately 20,000 passengers. This situation has created an opportunity for Vietnamese carriers to attract transit traffic and strengthen Vietnam's position as a regional aviation hub.
Supply and Policy Measures
Fuel suppliers, Skypec and Petrolimex Aviation, have assured the industry of fuel availability through March, with plans for April, though future supply remains uncertain amid geopolitical tensions. The CAAV is urging airlines to implement cost-saving measures, explore new routes, and coordinate with government authorities to seek support through policy adjustments and financial facilitation.
Industry officials emphasize the importance of maintaining route networks, diversifying supply sources, and exploring new markets including the Americas, Africa, and Asia to navigate the challenging environment created by the conflict. The Vietnamese government is expected to consider policy initiatives to mitigate economic impacts and support the aviation industry during this period of heightened geopolitical tension.
