Vietravel Airlines appeals to gov’t for jet-fuel tax breaks

Vietravel Airlines (VU, Hue Phu Bai Int’l) has appealed for government help to ease the burden of rising fuel costs, inflation, and a sluggish economy that is preventing many from travelling even as pandemic-related restrictions fall away, the newspaper Thanh Niên reported on March 17.

The carrier, which commenced scheduled flight operations in early 2021 and as travel restrictions began to be lifted resumed operations in December, called, in a letter to the office of the prime minister, for Viet Nam’s jet-fuel import tax – currently 7% – to be scrapped and for an environmental tax on jet fuel to be cut further amid rising prices. Its plea came several days after Vietnam Airlines (VN, Hanoi) made a similar demand.

The environmental tax on jet fuel was recently halved to VND1,500 dong (USD0.066) per litre. Vietravel Airlines suggested that it be reduced to VND1,000 (USD0.044).

The carrier, owned by the country’s biggest tourism company Vietravel, said fuel costs now account for over 30% of airlines’ total expenses as crude oil prices surge. If oil prices again exceed USD100 per barrel, it pledged to seek permission to impose a fuel surcharge on domestic flights.

Vietravel Airlines also once again requested preferential or zero-interest loans, credit that the country’s central bank promised last year. It warned that carriers had seen their cash resources dwindle after having been in a state of virtual hibernation for two years.

“Without the support of the state, businesses will certainly face a liquidity risk. Issues such as short-term debt, debt to suppliers, salaries to employees” cannot be sustained for long, it said.