Hanoi (VNA) – Many Vietnamese airlines havesought permission for fare hike on the ground that the world prices of fuel, whichaccounts for a big proportion of airlines’ operating expenses, are rising.

A number of domestic carriers, including Vietnam Airlinesand Vietjet Air, have submitted a request to the Civil Aviation Authority ofVietnam (CAAV) to raise their ticket prices, citing statistics of the InternationalAir Transport Association (IATA) that average jet fuel prices in August thisyear has went up 33.5 percent from one year ago.  

According to the CAAV, the current air fare framework wascalculated based on the price of Jet A1 fuel in December 2014 which stood at around84.7 USD per barrel, plus import tax of 7 percent and environmental protectiontax of 1,000 VND (0.043 USD) per litre.

Meanwhile, a barrel of Jet fuel in Asia and Oceania thisAugust fetched 86.7 USD, plus 7-percentimport tax and environmental protection tax of 3,000 VND (0.13 USD) per litre.

At the annual shareholders’ meeting recently, VietnamAirlines announced that the fuel costs make up about 30 percent of thecarrier’s operating expenses and even hit 38 percent at peak time. For each USdollar increase in fuel prices, the national flag carrier will see a rise ofabout 230 billion VND (9.85 million USD) in annual expenses.

According to the representative of another airline, the recentfuel price hike has resulted in an increase of around 16.7 percent in operatingcosts compared to September 2015, not to mention the extra costs caused by changesin foreign exchange rates, such as wage for foreign pilots or leasing aircraft.Therefore, it is necessary to raise the ticket prices, he said.

However, the CAAV has proposed to maintain the currentceiling to keep a lid on inflation this year and it will be reviewed next yearif the situation at that time proves necessity.

Contrary to complaints on the fuel rise, domesticairlines reported impressive business outcomes so far this year.

In the first seven months of 2018, Jetstar Pacific postedprofits for the first time in years.

Vietnam Airlines enjoyed quite good financial results inthe first half of 2018. In the second quarter alone, the carrier’s after-taxprofit hit 309 billion VND (13.23 million USD), a 4-fold increase against thesame period last year. The firm’s total after-tax profit in the first half ofthe year soared 83 percent to over 1.5 trillion VND (64.23 million USD).

Vietjet Air posted the highest profit of the localaviation industry in the first six months which was estimated at more than 2trillion VND (85.64 million USD). –VNA