Vietnamese air carriers pinpointed many difficulties that are hindering their operations, including a higher environmental tax on fuel, as they recently met with the country’s aviation watchdog.

The Civil Aviation Authority of Vietnam (CAAV) held the Ha Noi meeting to listen to the carriers in the hope of finding possible resolutions to their problems.

Duong Tri Thanh, Deputy General Director of national flag carrier Vietnam Airlines, said the new environmental tax, which will triple starting in May, will result in a 740 billion VND (34.49 million USD) cost overrun for the company from now to the end of this year.

Passengers leave an aircraft at Vinh Airport in Nghe An Province

Budget carriers Jetstar Pacific Airlines and VietJet Air too will incur extra expenses of 150 billion VND (6.99 million USD) and up to 400 billion VND (18.64 million USD) due to the new tax, respectively, Thanh added.

On March 10, the Standing Committee of the National Assembly passed a resolution to increase the tax to 3,000 VND a liter from 1,000 VND a liter for gasoline and jet fuel.

The 200-percent tax hike is said to help offset about 84% of the loss to be caused by a cut in tariffs on gasoline imports for the state budget, Dinh Nam Thang, Deputy Director of the Tax Policy Department under the Ministry of Finance.