Soaring Oil Prices Drive Up Jet Fuel Costs; Fuel Surcharges on U.S. Routes May Exceed 500,000 Won [Oil Prices Surge Again]

As oil prices surge due to the war in the Middle East, jet fuel costs are soaring, and fuel surcharges on flights to the United States in May are expected to exceed 500,000 won. In response, low-cost carriers (LCC) are moving to cut costs and improve operational efficiency, spreading a mood of belt-tightening across the airline industry.
According to the airline industry on the 13th, Korean Air and Asiana Airlines plan to announce their "May international flight fuel surcharges" on the 16th. Once the fuel surcharges of full service carriers (FSC) are finalized, LCCs will sequentially set and release their own May international fuel surcharges. The surcharge level is adjusted each month based on the average price of jet fuel in the Republic of Singapore spot market, known as Mean of Platts Singapore (MOPS). For the period used to calculate May international surcharges—from March 16 to early April—the average MOPS price was tallied at 465 to 475 cents per gallon. Under the Ministry of Land, Infrastructure and Transport’s distance-based system, if the MOPS average exceeds 470 cents, the highest bracket, Level 33, is applied.
After the United States and Iran agreed on a two-week cease-fire on the 7th, MOPS temporarily fell by more than 10%. However, when talks collapsed on the 12th, global oil prices came under renewed upward pressure. Depending on how prices move early this week, the unprecedented application of Level 33 is increasingly seen as a realistic scenario. If the top fuel surcharge bracket, Level 33, is applied, the one-way fuel surcharge on routes from Incheon to North America is expected to reach about 550,000 won, pushing the round-trip surcharge above 1 million won.
Short-haul routes to destinations such as Japan are also expected to see surcharges set in the 70,000 to 100,000 won range, nearly double the level applied in April.
With oil prices continuing to spike due to the prolonged conflict, airlines are expanding their austerity measures. Smaller LCCs, which have fewer hedging tools than FSCs, are taking the lead in cutting costs.
T'way Air announced that it would begin accepting applications for unpaid leave from all cabin crew members on this day. This is the first time T'way Air has implemented unpaid leave in about one year and eight months, since August 2024. Air Seoul recently introduced a paperless system to reduce paper usage, while Eastar Jet is reportedly set to adopt a system that designates and encourages the use of annual leave. Jin Air has postponed payment of a planned safety incentive bonus for all employees.
An airline industry official said, "Fuel surcharges reflect oil price trends over several months, so even if global oil prices start to fall, it is difficult for airfares to be lowered immediately," adding, "The South Korean government is urging airlines to refrain from raising surcharges, but carriers are also bound to apply them according to the formula, so the burden is heavy."
hoya0222@fnnews.com Kim Dong-ho Reporter