The Civil Aviation Authority of Vietnam (CAAV) proposes raising air service prices on domestic routes to deal with increased oil prices. (Photo: VNA) In a recent proposal sent to MoT, CAAV asked for a reduction in environmentalprotection and import taxes on jet fuels, and an increase in service fees ondomestic routes.
CAAV proposed raising passenger transportation fees on domestic routes by 3.75%to the rate set in 2014.
According to the International Air Transport Association (IATA), on July1, 2022, the price of Jet A1 fuel in Asia reached 153.59 USD per barrel whilethe average price of Jet A1 in 2022 was estimated at 143.4 USD per barrel.
IATA considers this a problem that causes the most "headaches"for air transport businesses.
In Vietnam, CAAV calculated: “If fuel costs account for 39.5% oftotal costs and other costs stay the same, local airlines are seeing the fuelcosts for July 2022 rising by up to nearly 93% compared to that of December2014, and by nearly 115% compared to that of September 2015. And the risingfuel costs are driving total costs for July 2022 up by 39% against December2014 and by over 46% against September 2015.”
A representative of Vietjet Air told local media that the airlinebuilds its business plan on the basis of gasoline prices at 80 USD per barrel in2022.
With the currentgasoline price, Vietjet Air will incur an additional cost of 6.5 trillion VND(282 million USD) to 7.5 trillion VND.
According to economic experts, if the high fuel costsare not removed, it will affect the exploitation output of thewhole industry and airlines will have difficulty recovering andexpanding their flight network, even having to close some routes due tounbalanced costs.
CAAV also proposed to apply the fee for assessment and issuance ofcertificates, permits and certificates in aviation activities atonly 80% of the prescribed rate to help the industry.
The agency also proposed a similar reduction to the security transactionregistration fee for aircraft.
In the latest move from the Ministry of Transport on July 6 In 2022, MinisterNguyen Van The signed Official Letter No 6779/BGTVT-TC to theMinistry of Finance proposing to reduce fees and charges in the field oftransport, in which, in the aviation industry, the MoT proposes to reducethe collection of some fees issued in Circular No 193/2016/TT-BTC datedNovember 8, 2016 by the Ministry of Finance regulating collection rates,payment, management and use of fees and charges in aviation industry.
Specifically, a 20% reduction of fees for assessment and issuance ofcertificates, permits and certificates in civil aviation activities, issuingpermits to enter and exit restricted areas at airports and airfields, and a 20%discount on security transaction registration fee for aircraft.
The implementation period is until the end of 2022.
On July 6, the National Assembly Standing Committee adopted aresolution on environmental protection tax for petrol, diesel andgrease. Accordingly, the environmental protection tax on jet fuel will belowered to 1,000 VND per litre from the current 1,500 VND.
The reduction will beapplied from July 11 until the end of this year./.
VNA
