Seoul: South Korean low-cost carriers have announced the cancellation of 900 round-trip flights and the implementation of cost-cutting measures, including unpaid leave, as escalating oil prices due to the Middle East conflict strain their operations.
According to Yonhap News Agency, the flight reductions are a response to the sharp increase in jet fuel prices following the U.S.-Iran conflict. Industry officials expect further cuts as airlines finalize their June schedules. Jeju Air Co., the country's largest budget airline, has already reduced 187 round-trip international flights, representing 4% of its operations, on routes from Incheon to Bangkok, Singapore, and the Vietnamese cities of Da Nang and Phu Quoc for May and June. The airline also suspended its Vientiane route since late April.
Jin Air Co. has cut 176 round-trip flights to destinations such as Guam and Phu Quoc, with more reductions anticipated pending the finalization of its June schedule. Among full-service carriers, Asiana Airlines Inc. has reduced 27 round-trip flights on six routes, including Phnom Penh and Istanbul, through July.
Korean Air Co., the largest carrier in South Korea, is closely monitoring the situation under an emergency management system but has not yet adjusted its flight operations. An airline official highlighted the declining travel demand for medium- and long-haul routes due to increased fuel surcharges, and another industry official noted that some Southeast Asian routes now require additional refueling stops, further driving up costs.
Jet fuel prices have surged 2.5 times since the Middle East conflict began. The average Singapore jet fuel price, used as a benchmark for fuel surcharges, increased by 150% to US$214.71 per barrel from March 16 to April 15. In response to these challenging business conditions, airlines such as Korean Air, Asiana Airlines, Jin Air, and T'way Air Co. have implemented emergency management measures. Both T'way Air and Jeju Air have introduced unpaid leave programs, while Jin Air has delayed safety incentive payments to employees.
Despite solid earnings in the first quarter, analysts predict that many airlines will incur losses in the second quarter due to rising oil prices, declining travel demand, and a weaker Korean won. Budget airlines are particularly vulnerable due to their weaker financial positions compared to major carriers.
T'way Air is already experiencing a cash crunch, with losses for two consecutive years and a debt ratio exceeding 3,400% as of the end of 2025. Air Premia Co. also faced capital impairment at the end of last year, which could lead to the revocation of its operating license if unresolved, according to industry watchers.