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

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 39.6 USD per barrel, ACV said.

Domestic supply meets only about 20% of demand, leaving airlines reliant on imports from countries such as China, Thailand and the Republic of Korea (RoK), 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 USD to 200 USD per ticket depending on distance, the report said.

Vietnamese carriers are prioritising trunk routes linking Hanoi, Da Nang and Ho Chi Minh 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% on average, partly due to airlines withdrawing lower-priced fare classes, which has dampened travel demand, particularly for leisure trips.

Vietnam’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 USD per barrel in mid-April, about 23 USD 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 11 trillion VND to 27 trillion VND (430 million USD to 1.05 billion USD) this year due to fuel price volatility.
Budget airline VietJet Air said its costs rose by about 24 million USD in April alone with Jet A1 prices at 195 USD 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 25.5 trillion VND and pre-tax profit of 13.5 trillion VND in 2025, up 12% and 6%, respectively, from a year earlier, with passenger traffic rising 9.4% to 120.3 million VND, including a 14% increase in international travellers.

As the main investor in Long Thanh 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./.