Fuel supply pressure triggers policy response

Airlines adjust capacity as shortages loom

Vietnam’s aviation sector will reduce flights from April as rising jet fuel prices and supply shortages disrupt operations, with carriers scaling back capacity and focusing on key routes amid the ongoing Middle East conflict Vietnam Airlines will suspend seven domestic routes from April 1, according to a Civil Aviation Authority of Vietnam document. The national carrier plans to cut 10–20% of its flights per month in the next quarter if jet fuel prices reach $160–$200 per barrel.This could lead to cancellations of up to 18% of international flights and up to 26% of domestic services.Low-cost carrier Vietjet Air is targeting an 18% reduction in total capacity in April, including a 22% cut in domestic flights and an 11% reduction in international routes. Bamboo Airways is expected to face the sharpest impact, with daily flights set to drop to 15–17, nearly half of its usual operations.The cuts come as Vietnam faces fuel supply pressure linked to disruptions in oil and gas flows through the Strait of Hormuz. The government has moved to support energy security by using its emergency fuel fund to stabilise prices. While domestic refineries meet about 70% of demand, more than 80% of crude imports come from the Middle East.In response, the government announced on Friday it will temporarily freeze some taxes on gasoline, oil and jet fuel until April 15 as an “urgent” step to stabilise the domestic market and ensure national security due to the ongoing conflict.Vietnam Airlines said it is “striving to keep operations stable across its network while adding more seats on high-demand routes, such as flights to Europe and Hanoi–Ho Chi Minh City, and during peak hours.”The aviation authority had earlier warned that jet fuel shortages could emerge soon as suppliers delay deliveries or may invoke force majeure clauses to terminate contracts. Around 70% of Vietnam’s jet fuel is imported, mainly from China and Thailand.Other carriers are also adjusting operations. Pacific Airlines will reduce flights by 8% to 30% between April and June, particularly on low-demand days. Sun PhuQuoc Airways plans to maintain its current schedule after securing fuel supplies until the end of next month, but may review operations if disruptions continue.