Seoul: South Korean low-cost carriers have reduced 900 round-trip flights and implemented emergency measures, including unpaid leave, as escalating fuel prices driven by the Middle East conflict strain the airline industry.
According to Philippines News Agency, the flight cuts are a direct response to the surge in jet fuel prices following the U.S.-Iran conflict. With some airlines yet to finalize their June schedules, further reductions in flights are anticipated.
Jeju Air Co., the largest budget airline in South Korea, has announced the reduction of 187 round-trip international flights, accounting for 4% of its total operations. These cuts affect routes from Incheon to Bangkok, Singapore, and Vietnamese cities such as Da Nang and Phu Quoc during May and June. Additionally, Jeju Air has suspended its Vientiane route for two months since late April.
Jin Air Co. has also reduced 176 round-trip flights to destinations such as Guam and Phu Quoc, with expectations of more cuts once its June schedule is finalized. Meanwhile, Asiana Airlines Inc., a full-service carrier, has cut 27 round-trip flights on six routes, including Phnom Penh and Istanbul, as a result of the ongoing conflict.
Korean Air Co., the largest carrier in South Korea, has yet to modify its flight operations but is closely monitoring developments under an emergency management system. The rise in fuel surcharges has led to a decrease in travel demand for medium- and long-haul routes, according to industry officials.
The surge in jet fuel prices, which have increased 2.5 times since the conflict began, has added significant costs, especially for routes requiring additional refueling stops. The average Singapore jet fuel price, a benchmark for fuel surcharges, rose to USD214.71 per barrel between March 16 and April 15, marking a 150% increase from two months prior.
In response to deteriorating business conditions, airlines such as Korean Air, Asiana Airlines, Jin Air, and T'way Air Co. have implemented emergency management strategies. T'way Air and Jeju Air have introduced unpaid leave programs, while Jin Air has delayed safety incentive payments to its employees.
Despite posting solid earnings in the first quarter, many airlines are expected to incur losses in the second quarter due to the impact of the conflict, rising oil prices, declining travel demand, and a weaker Korean won. Budget airlines are particularly at risk given their financial fragility compared to major carriers.
T'way Air is experiencing a cash crunch, with a debt ratio exceeding 3,400% by the end of 2025, after suffering losses for two consecutive years. Air Premia Co. was also in a state of capital impairment at the end of last year, raising concerns that its operating license could be revoked if the issue remains unresolved.
