Budget Airlines Petition Government for Jet Fuel Tax Cut to Lower Airfares

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Picture courtesy Facebook via wire

 

Budget airlines have urged the Ministry of Finance to lower the excise tax on jet fuel to help reduce operational costs and make air travel more affordable for passengers.

 

Deputy Finance Minister Julapun Amornvivat confirmed that low-cost carriers are seeking the government’s intervention to reduce the excise tax on jet fuel. This comes after a recent meeting where airline representatives discussed the economic challenges they face and their ongoing support for government initiatives to boost tourism.

 

Having been significantly impacted by the pandemic, these airlines are eager to strengthen their market positions. "The ministry must consult with the Energy Policy Committee before any changes can be enacted," Julapun explained. The Finance Ministry is currently evaluating the airlines' requests.

 

Julapun advised the budget airlines to look into other forms of government assistance, such as liquidity support loans and additional state initiatives that could address their financial challenges. He also pointed out the need to address the high cost of domestic airfares, which has been a cause for public and parliamentary concern.

 

He stated, “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.” 

 

To support domestic airlines during the pandemic, the government had previously reduced the excise tax on jet fuel from 4.726 baht per litre to 0.20 baht per litre for three years, from 2020 to 2022. The budget airlines argue that a similar measure is now required to assist in their recovery and to maintain affordable airfares for the public.

 

This request coincides with efforts by the Tourism Authority to promote tourism in 2024. The carriers emphasize that a reduction in the jet fuel tax would be a significant step toward making air travel more accessible as the sector continues its recovery.

 

-- 2024-06-14

 

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To me, if we’re going to go down this road of direct or indirect state subsidies, then I think the state has the right to have some of their issues also addressed by the carriers.

 

As example, I might say if we’re going to cut the Jet A/A1 tax by THBX per kilo, then I’d think it’s reasonable for the state to mandate a reduction in fares in A, B and C fare classes of equal or higher levels to that of the tax cut. 

 

If we’re going the route of direct support - then that’s something else and something bigger, and now I think the state should have a “seat at the table” so to speak in terms of planning and overview management as taxpayers money is now being used by a private enterprise and the state/public has rights to ensure that their assets are used for the larger public good.