Office worker Kim Su-jin, 30, is preparing for a long-dreamed-of trip to Rome, Italy, in May. She booked both the hotel and the flight well in advance. But anxiety is growing as the Middle East crisis has erupted. That is because her reservation includes a "nonrefundable option." Kim said, "I bought early to go even a little cheaper, but I'm worried I'll lose my money."
Ahead of the "golden holidays" in May, including Children's Day and Buddha's Birthday, there is a trend of trying to buy plane tickets in advance. The reason is that with high oil prices and a strong dollar, it is cheaper to buy even a day earlier. But the lingering effects of the Middle East crisis raise the possibility of cancellations, deepening travelers' dilemmas.
◇ Fuel surcharges to triple from April on high oil prices
According to the travel industry on the 31st, there is a trend to secure plane tickets before the fuel surcharge hike on the 1st of next month. Naver Shopping said that after airlines announced plans to raise fuel surcharges, bookings from the 16th to the 30th rose 37% from the previous two weeks (Mar. 1–15).
Hanatour said the overall package tour booking rate for May rose 15% from the same period last year. Modetour Network and Yellow Balloon Tour also saw booking rates rise 30% each over the same period.
Typically, fuel surcharges are set based on the Singapore jet fuel (MOPS) spot market price. Since the Middle East crisis, fuel prices have jumped, and fuel surcharges are also set for a series of hikes. On Korean Air Lines' Incheon–New York route, the fuel surcharge will rise more than threefold, from 99,000 won this month to 303,000 won next month.
A travel agency official said, "We recommend customers who book early to ticket early," noting, "Fuel surcharges are applied based on the ticketing date, not the travel date."
The surging exchange rate is also prompting earlier purchases. The won against the U.S. dollar (won-dollar exchange rate) surpassed the 1,530-won level intraday on the Seoul foreign exchange market. It is the highest level in 17 years since the global financial crisis.
For example, a ticket on United Airlines' Incheon–San Francisco route is $1,098 as of the 4th of next month. At the current won-dollar rate (1,533 won), that is 1.68 million won, more than 80,000 won pricier than a month ago.
◇ Airlines cancel and cut flights one after another
The problem is that there is also a growing chance that plane tickets will be canceled. That is because it is uncertain whether Middle Eastern airspace will be open, and recent jet fuel supplies have also been disrupted.
VietJet Air will suspend some flights on the Incheon–Nha Trang, Da Nang and Phu Quoc routes and the Busan–Nha Trang route next month. Vietnam Airlines will also not operate some Incheon–Hanoi and Ho Chi Minh flights in April and May.
VietJet Air's website said, "With the war dragging on, oil prices have risen, making cost burdens hard to bear," and "Jet fuel supply within Vietnam is also not smooth, so we were inevitably forced to cancel operations."
Domestic airlines have also begun cutting flights due to the burden of jet fuel prices. Asiana Airlines decided to reduce by 14 the number of flights on a total of four routes—Incheon–Phnom Penh in Cambodia and Incheon–Changchun, Harbin and Yanji in China—from next month through May. Asiana Airlines is said to plan to guide customers who have already paid for those routes to switch to flights on nearby dates.
Eastar Jet Co. will not operate the Incheon–Phu Quoc route from May, and plans to cut the Incheon–Da Nang route by three flights. Air Premia has been adjusting schedules on U.S. routes and the Bangkok route since the 23rd. Both Eastar Jet Co. and Air Premia will allow travelers to change travel dates for free or receive a full refund without fees.
As international oil prices continue to rise, there are projections that more cancellations and cuts could follow. On travel-related online communities, posts read, "I can't even feel secure about Southeast Asia routes due to the possibility of cancellations, so I'm thinking of going to Japan," and "The exchange rate is so expensive that I plan to stay in Korea during the May holidays."
An official at a domestic travel agency said, "If this drags on, flights could be canceled on a large scale, which is worrisome," adding, "Because package products are built on airline seats, it will be a headwind."