Việt Nam's domestic airfares rise 15-20 per cent on fuel crunch

Việt Nam's domestic airfares rise 15-20 per cent on fuel crunch

Domestic airfares in Việt Nam have risen by 15-20 per cent on average as a fuel supply crunch linked to conflict in the Middle East drives up costs, airport operator Airports Corporation of Vietnam (ACV) said in a newly released 2025 annual report.

A Vietnam Airlines aircraft is parked at the terminal of Đà Nẵng International Airport. Rising fuel costs linked to global supply disruptions have pushed up domestic airfares. — VNS Photo Bồ Xuân Hiệp

The state-run company warned that both domestic and global aviation markets face mounting challenges, with shortages of Jet A1 fuel emerging as a key pressure point.

Supply disruptions tied to Middle East tensions have pushed fuel prices sharply higher, with physical premiums reaching as much as US$39.6 per barrel, ACV said. 

Domestic supply meets only about 20 per cent of demand, leaving airlines reliant on imports from countries such as China, Thailand and South Korea, some of which have tightened exports.

Airlines have responded by cutting seat capacity in the second and third quarters of 2026, restructuring route networks and introducing fuel surcharges ranging from $20 to $200 per ticket depending on distance, the report said.

Vietnamese carriers are prioritising trunk routes linking Hà Nội, Đà Nẵng and HCM City, while optimising load factors and reducing overnight flights, ACV said. The measures have lowered aircraft movements at airports it operates.

The company estimates domestic ticket prices have climbed 15-20 per cent on average, partly due to airlines withdrawing lower-priced fare classes, which has dampened travel demand, particularly for leisure trips.

Việt Nam’s aviation regulator has proposed allowing fuel surcharges on domestic routes to support carriers facing rising operating costs.

Data from the International Air Transport Association showed jet fuel prices in Asia-Pacific were above $207 per barrel in mid-April, about $23 higher than the global average and roughly 2.4 times the 2025 average.

National flag carrier Vietnam Airlines estimates it could incur additional costs of VNĐ11 trillion to VNĐ27 trillion ($430 million to $1.05 billion) this year due to fuel price volatility. 

Budget airline VietJet Air said its costs rose by about $24 million in April alone with Jet A1 prices at $195 per barrel.

Beyond fuel pressures, ACV said the sector also faces risks from volatile exchange rates and interest rates, which could further weigh on profitability.

ACV, which operates over 20 airports nationwide, has yet to set 2026 financial targets as it reviews its business plan for shareholder approval.

The company reported revenue of VNĐ25.5 trillion and pre-tax profit of VNĐ13.5 trillion in 2025, up 12 per cent and 6 per cent, respectively, from a year earlier, with passenger traffic rising 9.4 per cent to 120.3 million, including a 14 per cent increase in international travellers.

As the main investor in Long Thành International Airport, ACV reiterated its target to complete construction in the third quarter and begin commercial operations in the fourth quarter of 2026. However, it has warned of a shortfall of nearly 6,000 workers, raising the risk of delays.  

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