Korean Air Lines said on the 31st it will shift to an emergency management system starting tomorrow, Apr. 1. It said it is taking response measures as international jet fuel prices surged after the United States and Israel's attack on Iran on the 28th of last month.
On the day, Woo Kee-Hong, vice chairman of Korean Air Lines, said on the employee bulletin board, "With tensions in the Middle East continuing to escalate, an abnormal high oil price situation is persisting," adding, "Starting in April, we will shift to an emergency management system and immediately implement phased response measures by oil price levels to promote companywide expense efficiency."
He said, "In March this year, the average Dubai crude price is $129 per barrel, and the jet fuel (Sing-Jet) price is $194 per barrel, and our fueling unit price for next month is expected to reach 450 cents per gallon."
He added, "This far exceeds the business plan's benchmark oil price of 220 cents per gallon, adding an enormous monthly fuel expense burden," and said, "If this situation is prolonged, it will disrupt the achievement of the annual business plan targets."
He went on, "This measure is not a simple one-off expense cut, but an opportunity to strengthen our structural fundamentals, complete a successful integration, and lay the groundwork for stable future growth," adding, "Leaders and members of each institutional sector should actively participate in the phased response measures following the system transition."
With jet fuel prices, which account for 20%–30% of total expenses, soaring, the airline industry is declaring emergency management one after another. Before Korean Air Lines, T'way Air and Asiana Airlines declared emergency management on the 16th and 25th, respectively.