Korean airline tickets issued this month will carry fuel surcharges roughly double those of the previous month, as the Middle East conflict pushes international oil prices higher. Long-haul tickets to U.S. destinations such as New York and Washington will incur fuel surcharges of more than 1 million won ($730) round-trip. Even so, the higher surcharges fail to offset rising fuel costs, prompting carriers to cut flights on less profitable routes.
According to industry sources on Wednesday, tickets issued this month are subject to the highest tier — stage 33 (470 cents per gallon or more) — of the fuel surcharge system. It is the first time stage 33 has been applied since the current fuel surcharge framework was introduced in 2016, marking a 15-stage jump in just one month from stage 18 in the previous month.
A fuel surcharge is an additional fee that airlines add to fares to compensate for losses from rising oil prices. Based on the surcharge tier, each airline sets and imposes the fee on a monthly basis after its own adjustments.
Korean Air will charge fuel surcharges ranging from a minimum of 75,000 won to a maximum of 564,000 won one-way starting this month. This is 1.8 to 1.9 times higher than the previous month's range of 42,000 won to 303,000 won. The shortest routes, such as Fukuoka and Qingdao, will carry a 75,000 won surcharge, while the longest routes, including New York, Atlanta, Washington and Toronto, will incur 564,000 won.
Asiana Airlines' international fuel surcharges for this month range from 85,400 won to 476,200 won one-way, roughly double the previous month's range of 43,900 won to 251,900 won. Jeju Air, Korea's largest low-cost carrier (LCC), will charge fuel surcharges of $52 to $126 one-way on international flights departing from Korea, up from $29 to $68 in the previous month.
While rising fuel surcharges are increasing the burden on consumers, the increases are not enough to offset airlines' rising fuel costs. One LCC reported that its fuel cost burden last month rose 120% from the previous month and 130% from a year earlier. The higher surcharges are said to cover only half of the increase.
As a result, airlines are cutting flights on less profitable routes. Asiana Airlines had initially planned to cancel a total of eight flights on three international routes this month but recently expanded the scale to 13 flights.
Jin Air did not operate 45 round-trip flights on eight routes last month and will not operate 131 flights on 14 routes this month. Air Premia, which mainly operates mid- to long-haul routes, decided early on to cancel 22 flights in July. The airline will cut eight flights on the Incheon-Da Nang route, six on the Los Angeles route, and four each on the San Francisco and Honolulu routes. Korean Air is closely monitoring the situation, according to industry sources.
"We have switched to an emergency management system and are implementing cost-saving plans in phases, including reducing non-essential operating expenses," an airline industry official said.
