A person surnamed Kim (48), who lives in Yongsan District, Seoul, was startled on the 1st morning while checking a flight reservation for a trip to Europe. The price of an Asiana Airlines economy round-trip ticket to Italy jumped by about 500,000 won, from 1,846,000 won on the 13th of last month, about 15 days earlier, to 2,345,000 won on the day.
Kim said, "When I paid for the ticket last month, I heard that fares would rise a lot because of the war between the United States and Iran, but I was surprised that the increase was bigger than I expected," adding, "The exchange rate keeps rising, so it seems many people trying to travel abroad will decrease for the time being."
Starting on the 1st, fuel surcharges applied to airfares by each airline rose sharply. Airlines calculate and apply monthly fuel surcharges based on international jet fuel prices, and with global oil prices surging due to the war between the United States and Israel and Iran that began in February, the surcharge for April spiked.
Korean Air Lines raised the one-way fuel surcharge for North American routes departing Incheon for New York, Dallas, Boston, Chicago, Atlanta, Washington, D.C., and others to 303,000 won from 99,000 won last month, more than tripling it starting on the day. On a round-trip basis, that means 606,000 won in fuel surcharges alone from the day.
Fuel surcharges applied to tickets on other routes also rose across the board. The one-way surcharge for routes from Incheon to the U.S. West Coast, including Los Angeles (LA) and San Francisco, and to Europe, including London, Paris, and Rome, increased from 79,500 won to 276,000 won.
For Southeast Asia routes with high passenger volumes, the fuel surcharge for routes from Incheon to Bangkok, Phuket, Singapore, Ho Chi Minh City, Nha Trang, and Guam rose from 39,000 won to 123,000 won.
Asiana Airlines also raised the fuel surcharge for routes from Incheon to North America and Europe from 78,600 won to 251,900 won starting on the day. The Incheon–Phuket and Singapore routes went from 46,600 won to 147,900 won, and the Incheon–Bangkok, Ho Chi Minh City, Nha Trang, and Chiang Mai routes went from 40,800 won to 127,400 won, respectively. Fuel surcharges applied to most routes rose to more than three times the previous month's level.
Low-cost carriers (LCCs) also applied sharply higher fuel surcharges starting on the day. Jeju Air, which sets and applies its surcharges in U.S. dollars each month, raised the one-way surcharge for Singapore, Bali, and Batam routes from $22 to $68. Routes to Bangkok, Chiang Mai, and Ho Chi Minh City increased from $20 to $60.
A travel industry official said, "Most demand for Southeast Asia routes comes from people looking to enjoy budget vacations, so if a round-trip fuel surcharge of nearly 300,000 won is added, the expense burden will feel significant," adding, "Not only North America and Europe but most international routes are likely to see fewer passengers."
The problem is that fuel surcharges are highly likely to jump even more starting next month. According to the airline industry, fuel surcharges are calculated based on the average price of jet fuel traded in the Singapore spot market from the 16th two months before ticketing to the 15th one month before. The surcharge applied from the day was set based on jet fuel prices traded from February through last month.
According to S&P Global, the average price of jet fuel traded in the Singapore spot market from Feb. 16 to the 15th of last month was $3.27 per gallon. Prices during this period reflect roughly half of the impact from the war between the United States and Iran that began in late February.
Jet fuel prices from the 16th of last month to the present, which are reflected in domestic airlines' fuel surcharges next month, overlap with the period in which the war is ongoing. As the war began and global oil prices surged, jet fuel prices have also been rising quickly. This is why there are projections that next month's fuel surcharges will soar to much higher levels than this month.
In fact, as of the 27th of last month, the price of jet fuel in the Singapore spot market was reported at $5.33 per gallon. If prices do not fall sharply through the 15th of this month, fuel surcharges can only rise further. Some forecast that next month the fuel surcharge on Korean Air Lines' North American round-trip tickets will exceed 1 million won.
With airfares rising significantly due to higher fuel surcharges, passenger demand for airlines is expected to decrease for the time being. In response, several airlines have begun measures such as reducing international routes and flight frequencies.
Korean Air Lines, through a notice sent to all employees on the 31st of last month, said it would switch to an emergency management system starting this month and implement phased responses according to oil prices. Asiana Airlines, which entered emergency management on the 25th of last month, decided to cut a total of 14 round-trip flights on four international routes, including China and Cambodia, through next month.