Airline fuel surcharges are skyrocketing. Korean Air and Asiana Airlines set the May domestic fuel surcharge at 34,100 won per one-way trip — more than four times the April level of 7,700 won. For a family of four hoping to visit Jeju Island over the golden holiday weekend, airfare has ballooned by more than 200,000 won in just one month. This is the largest increase since the current surcharge system was introduced in 2016. International surcharges, expected to be announced soon, are projected to be even steeper. Some say round-trip surcharges on U.S. East Coast routes could exceed 1 million won. A joke circulating in travel forums captures the mood: "The ticket you buy today is the cheapest it will ever be."
Rising oil prices have put airlines on alert as well. There is talk that flying planes is now a money-losing proposition. Low-cost carriers are cutting routes. The real problem is the fallout from canceled flights. Passengers may get refunds, but disrupted schedules and additional costs fall squarely on their shoulders.
Fuel surcharges are a product of the 1970s oil crises, introduced to ease the burden of soaring fuel costs. They were first applied to air passengers in 2005, and in 2008 the tier system expanded from 16 to 33 levels. In 2016 the system was broken down by distance, but its basic framework remained unchanged. The May domestic surcharge was set at tier 18, based on the March Mean of Platts Singapore (MOPS) jet fuel price. Prices have more than doubled since the Iran war.
Consumers are frustrated with the timing and method of calculation. Fuel surcharges are based not on the booking date or the boarding date but on the date of ticket issuance. Passengers on the same flight can pay differences of hundreds of thousands of won depending on when they paid. Foreign airlines sometimes bundle surcharges into baggage fees and other charges. Prices vary wildly from carrier to carrier. Complaints persist that airlines are quick to raise surcharges when oil prices rise but slow to lower them when prices fall. Consumers do not even know the calculation criteria — a situation critics call information asymmetry.
Rising fuel surcharges are not simply a travel-cost issue. Higher air fares push up export logistics costs, adding burden even to key export items such as semiconductors. The Ministry of Land, Infrastructure and Transport (MOLIT) is reviewing improvement measures, but no conclusions have been reached. There are growing calls for a system that flexibly reflects load factors, aircraft types and cargo freight rates.