International airline tickets issued starting Tuesday will carry fuel surcharges nearly double those of a month ago, as Middle East geopolitical tensions have driven global oil prices to record highs. Airlines say the surcharge hikes alone are not enough to offset losses and are sharply reducing flights on less-profitable routes.
According to the aviation industry, this month's international fuel surcharge has jumped to the highest tier of Level 33 (470 cents or more per gallon) for the first time since the current system was introduced in 2016. The surcharge surged 15 levels in just one month from Level 18 the previous month. A fuel surcharge is an additional fee airlines add to fares to offset losses from fluctuations in fuel prices.
Korean Air will charge surcharges ranging from 75,000 won to a maximum of 564,000 won per one-way ticket this month. That is 1.8 to 1.9 times higher than a month earlier, when surcharges ranged from 42,000 won to 303,000 won. Short-haul routes to Qingdao and Fukuoka will carry an additional 75,000 won, while long-haul routes to New York, Washington and Atlanta will add 564,000 won.
Asiana Airlines faces a similar situation. Its international surcharges this month range from 85,400 won to 476,200 won one-way, nearly double the previous month's 43,900 won to 251,900 won. Jeju Air, the nation's top low-cost carrier (LCC), will charge $52 to $126 on international routes departing from Korea, up sharply from $29 to $68 the previous month.
While passengers feel a much heavier cost burden, airlines themselves are struggling. Surcharge revenues are not enough to offset the surge in fuel expenses. One LCC saw its fuel expenditures jump 120% from a month earlier and 130% from a year earlier last month, but the surcharges it collected covered less than half of the increase.
Against this backdrop, the industry is aggressively cutting unprofitable routes. Asiana Airlines had initially planned to cancel eight flights on three international routes this month, but recently expanded the cancellations to 13. Jin Air, which suspended 45 round-trip flights on eight routes the previous month, has significantly expanded cuts to 131 flights on 14 routes this month.
Air Premia, a carrier specializing in medium- and long-haul routes, has also confirmed it will cancel 22 flights in July. These include eight flights on the Incheon-Da Nang route, six on the Los Angeles route, and four each on the San Francisco and Honolulu routes. Even Korean Air, which has yet to formalize its flight-reduction plan, is closely monitoring market trends.
"We have shifted to an emergency management system," an aviation industry official said. "We are taking aggressive cost-cutting steps, including blocking non-essential spending."
