Budget airlines push jet fuel tax cut to reduce airfare prices

Budget airlines have issued an appeal to the Finance Ministry to reduce the excise tax on jet fuel, to help mitigate their operational costs with the fragile state of the industry.

Following a meeting with representatives from low-cost airlines, Deputy Finance Minister Julapun Amornvivat reported that the carriers discussed economic challenges and reiterated their commitment to supporting government measures aimed at boosting tourism.

Having endured the impacts of the pandemic, low-cost carriers are striving to bolster their market positions. They have requested the ministry’s intervention to lower the excise tax on jet fuel. The ministry is currently evaluating these requests, said Julapun.

“The ministry must consult with the Energy Policy Committee before any changes can be made.”

He also mentioned that the budget airlines were advised to explore other forms of government assistance, such as loans for liquidity support, and state initiatives to address their financial concerns.

Julapun highlighted the need to tackle the issue of high domestic airfares, which has been a subject of public complaints and parliamentary discussions. He urged low-cost carriers to present clear proposals on how government assistance, such as reducing the excise tax on jet fuel, could help lower airfares and benefit consumers.

“If these carriers can ensure that a lower excise tax will reduce passenger ticket prices, it will increase the likelihood of the proposal being approved by relevant agencies and the Cabinet.”

The pandemic severely impacted airlines, leading the government to reduce the excise tax on domestic jet fuel from 4.726 baht per litre to 0.20 baht per litre for three years, from 2020 to 2022, to support domestic airlines and stimulate tourism.

The carriers say a similar measure is necessary to help them recover and keep airfares affordable for the public.

This appeal has been submitted in a period of time when the Tourism Authority of Thailand is working with airlines to boost tourism in 2024.