Fuel surcharges on airline tickets issued this month have surged more than threefold as international oil prices soar amid the Middle East war.
The aviation industry said Thursday that April fuel surcharges jumped to level 18 out of 33 tiers, up from level 6 in March.
The average price of Singapore jet fuel from February 16 to March 15 — the benchmark period for this month's surcharges — stood at 326.71 cents per gallon.
Fuel surcharges are additional fees added to one-way airfares to help airlines offset losses from rising oil prices.
Korean carriers have raised fuel surcharges on tickets issued this month by up to more than threefold, reflecting the jump in the benchmark tier.
Korean Air (003490.KS), South Korea's largest carrier, charged between 13,500 won and 99,000 won per one-way international flight last month depending on distance. This month, the range has risen to between 42,000 won and 303,000 won. Routes with the longest distances from Incheon — including New York, Chicago, Atlanta, Washington and Toronto — now carry a surcharge of 303,000 won, a 3.1-fold increase.
The industry expects fuel surcharges applied in May could rise further as international oil prices continue their upward trend. The price of jet fuel in Asia, the key benchmark for Singapore jet fuel averages, stood at 522.08 cents per gallon as of March 31, exceeding the 470-cent upper threshold of the surcharge tier system.
The benchmark period for April surcharges also includes prices from February 16 to 28 — before the war broke out — meaning post-war price movements are not fully reflected. This makes further increases highly likely.
However, airlines face a cap on how much they can raise fuel surcharges, limiting their ability to pass on the full burden of rising oil prices to passengers. As a last resort, carriers are expected to cut more flight operations. Asiana Airlines (020560.KS), Jin Air (272450.KS), Air Busan and most other airlines have already reduced services on less profitable routes since this month.
