Domestic airfare pressures in South Korea are mounting alongside international routes, as rising global oil prices driven by Middle East conflicts push fuel surcharges higher. Korean Air's domestic fuel surcharge has climbed to a record high, and low-cost carriers (LCCs) are expected to raise their surcharges to similar levels.
According to Korean Air on the 7th, the June domestic one-way fuel surcharge (including value-added tax) for Korean Air and Asiana Airlines has been set at 35,200 won. This is the highest level since the domestic fuel surcharge system was introduced. The May domestic one-way fuel surcharge was 34,100 won, a 4.4-fold increase from 7,700 won in April.
The domestic fuel surcharge is calculated based on the average Mean of Platts Singapore (MOPS) jet fuel price from two months prior. April's MOPS, which serves as the basis for June, was 477.20 cents per gallon, up from the previous month. As a result, the surcharge tier rose from the 18th to the 19th level.
The aviation industry expects the international fuel surcharge to also remain at peak levels. Korean Air and Asiana Airlines applied the highest 33rd tier of the international fuel surcharge for the first time last month. Industry observers say that if high oil prices persist, it will not be easy to pass on additional burdens through fares.
"Domestic Travel Also a Burden"... Travelers and Airlines Feel the Strain
Fuel surcharge hikes translate directly into consumer burden. Since fuel costs are built into airfare, domestic travel expenses are also naturally rising. There are growing concerns that even demand from travelers who had been turning to domestic destinations such as Jeju instead of overseas trips could shrink.
The travel industry is particularly watching the summer vacation booking trend closely. As of the 3rd of this month, the number of tourists visiting Jeju continues to grow, but many analysts say this largely reflects demand from travelers who purchased tickets before the fuel surcharge hike. Tourists typically finalize their travel plans one to three months in advance, so the full impact is likely to emerge from the peak summer season.
Unusual signs have also been detected in the group tour market. Some travel agencies and charter bus operators are reportedly having difficulty finalizing school field trips and group bookings for the second half of the year. The explanation is that rising oil prices have increased cost volatility, leading to more cases of delayed bookings.
Reduced domestic flight supply from airlines is also cited as a burden. The number of domestic flights scheduled for this summer has decreased compared to last year, and the number of available seats has also been reduced.
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