All aviation affiliates under Korean Air have declared emergency management in response to the oil price shock stemming from the Middle East. Following Korean Air, Asiana Airlines, Air Busan, and Air Seoul, Jin Air has now officially entered a company-wide emergency management regime.
According to the aviation industry on the 31st, Jin Air posted a message on its internal bulletin board under the name of CEO Park Byeong-ryul, officially declaring a shift to emergency management. "As a preemptive self-rescue effort to overcome the crisis, we will enter an emergency management regime starting in April," Park said. Jin Air is expected to launch sweeping self-rescue measures, including a reassessment of route profitability and company-wide cost reductions.
As surging jet fuel prices driven by the Middle East conflict show growing signs of becoming prolonged, the sense of crisis among low-cost carriers (LCCs), which have relatively weaker cost competitiveness, has reached its peak. The more flights they operate, the more fuel cost losses snowball.
Full-service carriers also declared emergency management one after another, unable to withstand the soaring fuel prices. Korean Air Vice Chairman Woo Ki-hong said in a message to employees on the same day, "We will shift to an emergency management regime effective April to prepare for rising costs driven by the surge in fuel expenses." Asiana Airlines previously announced one-off frequency reductions totaling 14 flights across four international routes over April and May to defend profitability.
The aviation industry is closely watching whether Jin Air's move will trigger a "domino effect of emergency management" across the broader LCC sector. LCCs have relatively weaker capital bases and higher shares of fuel spending, leaving them with far too little capacity to absorb the high oil price shock.
An aviation industry official said, "There are limits to what individual companies can do to cope with the oil price surge." The official added, "This is a critical time for the government to craft effective support measures, such as a temporary reduction in jet fuel tariffs and airport facility fee exemptions."
