As the war among the United States, Israel, and Iran drags on, jet fuel prices have surged, sharply driving up fuel surcharges that airlines pass on to fares. In particular, fuel surcharges for air cargo are set to rise more than for passenger travel, increasing the burden on export corporations.
According to the airline industry on the 3rd, Korean Air Lines and Asiana Airlines will raise fuel surcharges for air cargo departing from Korea by an average of 334% from the previous month. The surcharges will apply from the 16th of this month through the 15th of next month. Earlier, starting on the 1st of this month, Korean Air Lines increased passenger fuel surcharges applied at ticketing by 210%, and Asiana Airlines by 214%.
By route, the fuel surcharge for long-haul flights rose 329%, from 510 won to 2,190 won per kilogram. Medium-haul routes climbed 338%, from 470 won to 2,060 won, and short-haul routes rose 336%, from 450 won to 1,960 won.
AIRZETA Co., a cargo-only airline, also raised fuel surcharges by an average of 326% over the same period. Short-haul routes increased from 450 won to 1,920 won per kilogram, medium-haul from 470 won to 2,020 won, and long-haul from 510 won to 2,150 won.
Typically, short-haul routes include Japanese cities and eastern Chinese cities with average flight times of up to two hours. Medium-haul routes include countries in Asia and Oceania excluding India and Australia/New Zealand, and long-haul routes include Europe, North America, Australia, and India.
Global cargo airlines operating in Korea, such as FedEx and UPS, set fuel surcharges in line with jet fuel prices for the U.S. Gulf Coast that the U.S. Energy Information Administration (EIA) publishes weekly, and those surcharges are also rising as oil prices increase.
With cargo fuel surcharges more than tripling, fare pressure on export corporations is expected to intensify. According to the Hong Kong TAC Index, as of the 30th of last month, before the new fuel surcharges took effect, the Baltic Air Freight Index (BAI), a global air cargo rate indicator, stood at 2,396, up 9.3% from the previous week.
Industries that primarily export by air cargo include semiconductors, electronics/electrical products, and pharmaceuticals. Air transport also accounts for a large share of exports by small and midsize firms. Looking at the number of complaints about damages and difficulties by small and midsize enterprises related to the Middle East war that the Ministry of SMEs and Startups released recently, rising logistics costs accounted for 114 cases, or 35% of all filings.
An airline industry official said, "In the next month, when the oil price increases caused by the war between the United States and Iran are fully reflected, fuel surcharges are likely to rise even more than this month," adding, "The difficulties facing export corporations will grow further due to higher oil prices and weakening global demand."