With the aviation industry on high alert amid high oil prices driven by the U.S.-Iran war, T'way Air, the country's No. 3 low-cost carrier (LCC), has decided to implement unpaid leave for flight attendants. The airline aggressively expanded by adding long-haul routes to Europe and elsewhere, but management difficulties appear to have deepened recently due to high oil prices and fewer passengers.
According to the LCC industry on the 13th, T'way Air recently announced that it is accepting applications for unpaid leave from all cabin crew. It will be the first time in a year and six months that T'way Air has implemented unpaid leave since Aug. 2024, when delays in aircraft deliveries created idle staffing.
T'way Air's unpaid leave will apply to flight crew scheduled to work in May–June. Depending on factors such as oil price trends and changes in passenger numbers, the leave period could be extended, according to reports. With the peak season beginning in July and the possibility that the U.S.-Iran war could end and stabilize international oil prices, some interpret the initial two-month limit as a wait-and-see move.
T'way Air is seen as facing particularly tough conditions even within the LCC sector. Since 2024, the airline has increased investment in long-haul routes, including launching service to Europe, which has added to its financial burden.
On top of that, this year's U.S.-Iran war has sharply pushed up the won against the dollar and sent oil prices soaring, creating a double burden of financial strain from expense pressures and a drop in passengers.
As jet fuel import prices surged, domestic airlines sharply raised fuel surcharges, which are added to ticket prices, starting this month. For LCCs, most routes are short-haul and relatively inexpensive—domestic, Japan, China, and Southeast Asia—so higher fuel surcharges have a relatively smaller impact on passenger numbers. In T'way Air's case, its higher share of European routes means it will take a bigger hit if oil prices keep rising.
T'way Air's debt ratio rose as it began sequentially launching European routes in 2024, reaching 3,483% at the end of last year, the highest among LCCs. During the same period, Jeju Air's debt ratio was 754%, Jin Air's 423%, and AIR BUSAN's 801%, all far lower than T'way Air's.
T'way Air has posted losses since the second quarter of 2024, and as of the second quarter of last year, total equity turned negative, resulting in complete capital impairment. The company subsequently injected capital through a series of paid-in capital increases, but continued losses have kept concerns about its financial structure growing.
An airline industry official said, "If the U.S.-Iran war is not concluded before the summer peak season begins, T'way Air's management difficulties will intensify in the first half."