"Even if we can secure fuel in Europe, if we can't get fuel to return from Southeast Asia, we can't fly."
The high oil prices and surging exchange rates triggered by the prolonged Middle East conflict are hammering the aviation industry at home and abroad. While South Korea's low-cost carriers (LCCs) are fighting to survive through route cuts and fuel surcharge hikes, signs of an "aviation crisis" driven by jet fuel supply shortages are emerging across Asia.
Korean LCCs Cut Routes, Triple Surcharges Amid Profitability Crunch
According to the aviation industry on the 24th, Korean LCCs have begun scaling back operations as they can no longer withstand deteriorating profitability.
Air Busan will cut a total of 20 flights starting next month on three major routes from Busan to Da Nang, Cebu and Guam. Jet fuel accounts for approximately 30% of airlines' operating costs and is paid in U.S. dollars. When oil prices and exchange rates surge simultaneously, losses inevitably grow with every flight operated.
The burden on passengers is also rising rapidly. Domestic fuel surcharges will increase by approximately 1,100 won next month. International surcharges, in particular, are expected to rise up to roughly three-fold depending on flight distance, reaching levels of $25 to $76. Since fuel surcharges are applied based on the ticketing date rather than the departure date, travelers departing in April or May can lock in pre-hike rates by purchasing tickets within March — prompting a rush to book early.
"There's No Fuel": Jet Fuel Supply Crunch Hits Asia and Oceania
The problem is spreading beyond simple cost increases into outright supply shortages. The New York Times reported that Asian airlines are canceling thousands of flights due to jet fuel supply difficulties. Jet fuel prices have surpassed $200 per barrel, more than doubling compared to pre-war levels.
Jet fuel is particularly vulnerable because it has stricter quality standards than other refined products and faces higher risks of degradation, making long-term stockpiling difficult. These characteristics make it the fuel most susceptible to supply chain shocks. China was the first to impose restrictions and bans on exports of refined products including jet fuel. Thailand followed by temporarily banning exports of jet fuel and certain other fuels.
Vietnam was hit hardest by these measures. The country relies on China and Thailand for approximately 75% of its jet fuel imports, making it difficult to find alternative supply sources. Vietnamese aviation authorities warned that jet fuel shortages could begin as early as next month.
The situation in Australia is also severe. Australia depends on imports for 90% of its fuel, and as of early this month, jet fuel reserves stood at just 32 days' worth. Industry observers say Australia, like Vietnam, could face disruptions to normal flight operations starting next month.
The impact of the supply crunch is already materializing. Air New Zealand decided to cancel 1,100 flights due to the jet fuel supply shortage. Air New Zealand CEO Nikhil Ravishankar called the situation "unprecedented."
The global aviation industry is characterizing the crisis as "the worst supply crisis ever." Ben Smith, CEO of Air France-KLM, said, "We have begun drafting scenarios for how to respond to the fuel shortage. Even if we can secure fuel in Europe, we may not be able to get fuel to return from Southeast Asia. Without fuel, there is no flight."
EasyJet CEO Kenton Jarvis also noted supply uncertainty, saying, "Nobody is saying 'there won't be a problem six weeks from now.'" Justin Erbacci, Director General of Airports Council International (ACI), said, "The bigger short-term concern is not fuel prices but whether supply will be sufficient going forward." Willie Walsh, Director General of the International Air Transport Association (IATA), assessed the situation as "the biggest supply problem we have ever experienced."
From University Closures to Four-Day Workweeks: The World Scrambles to Cut Energy Use
The fuel shortage fallout is spreading beyond aviation into the broader functioning of nations. Countries are rolling out emergency measures one after another to reduce energy consumption.
Sri Lanka introduced a four-day workweek for public institutions and schools and implemented fuel rationing. Bangladesh ordered universities to close and banned lowering indoor temperatures below 25 degrees Celsius. Pakistan also ordered a two-week closure of all schools nationwide.
Thailand recommended that government employees work from home and encouraged taking stairs instead of elevators, demanding even everyday energy savings. Television hosts were seen appearing on air without jackets to encourage reduced air conditioning use.
Slovakia restricted diesel sales at gas stations and imposed higher prices for foreign vehicles. The United Kingdom recommended that restaurants and pubs turn off refrigerators overnight — though the measure sparked backlash over concerns about "lukewarm beer."
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