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Korean Air activates emergency protocols as jet fuel costs soar
South Korea's flagship carrier has shifted into crisis management mode to counter the financial strain of surging fuel prices, triggered by the escalating US-Israel conflict with Iran. A company spokesperson confirmed on Tuesday that internal cost-cutting measures are being implemented to safeguard financial stability amid global economic uncertainty.
Fuel prices surge over 50% since conflict began
Crude oil costs have climbed more than 50% since the war erupted on 28 February, while jet fuel prices have more than doubled. The spike has forced airlines across Asia to adopt emergency measures similar to those used during the Covid-19 pandemic, according to Tan Chi Siang, a consultant at PwC Singapore.
Asian carriers face a "double shock": rising global oil prices compounded by a regional jet fuel shortage, Tan said. South Korea, heavily dependent on Middle Eastern oil, is particularly vulnerable to supply disruptions.
Regional carriers follow suit with cost-saving measures
In recent days, multiple South Korean airlines-including Asiana Airlines and Busan Air-have entered emergency management mode. Typical measures include delaying upgrades and reducing flight frequencies, though some may scale back operations entirely, Tan noted.
Korean Air employees received an internal memo outlining the emergency plan. Vice Chairman Woo Ki-hong told staff the airline is preparing for "a surge in fuel expenses" and will implement oil-price-linked cost reductions. Woo framed the measures as an opportunity to "strengthen our structural foundation" rather than a short-term fix.
China's aviation sector warns of operational risks
Despite being a major energy producer, China remains the world's largest oil importer, leaving its aviation industry exposed to global shocks. China Eastern Airlines, one of the country's largest state-owned carriers, warned on Monday that geopolitical conflicts could significantly impact its operations this year.
Many Chinese airlines have raised fuel surcharges since the Iran war began. Authorities have also reportedly ordered domestic refineries to halt fuel exports to control prices.
In Hong Kong, Cathay Pacific has included fuel surcharges on all flights, leading to sharp fare increases.
Japan and India adjust strategies amid fuel shortages
Japan's All Nippon Airways (ANA) said it will not raise fuel surcharges for April and May tickets, as prices were set before the conflict. A spokesperson noted the immediate impact is "limited" due to existing surcharges and advance fuel purchases.
Japan Airlines, however, has not announced specific actions yet. Some routes, such as flights between Japan and Europe, have seen price hikes due to increased demand after Middle East route closures.
India's aviation industry has been hit hard by Middle East flight cancellations, its largest international market. The country's aviation authority expects domestic flights to drop by 10% between March and October. On 23 March, the government lifted fare caps, allowing airlines to raise prices as fuel costs climb.
Southeast Asia faces acute fuel shortages
Singapore Airlines and its budget carrier Scoot have increased fares to offset rising fuel costs, which account for 30% of their recent spending. The adjustments "defray" but do not fully cover the increased expenses, a spokesperson said.
Singapore's civil aviation authority postponed a planned green jet fuel levy, originally set for April 2026, citing the war's impact. The levy aimed to fund sustainable aviation fuel purchases.
The Philippines declared a national energy emergency on 24 March, with President Ferdinand Marcos warning that grounding planes due to fuel shortages is a "distinct possibility." Some airlines have been barred from refueling abroad.
Vietnam's aviation agency warned of potential jet fuel shortages as early as April, as suppliers delay deliveries. Vietnam Airlines has already suspended several domestic flights. The country imports nearly 90% of its oil from the Middle East.
Major airlines adapt while smaller carriers struggle
Larger airlines have more flexibility to mitigate the crisis, said Bryan Terry of Alton Aviation Consultancy. They can redeploy aircraft to fill gaps left by Gulf carriers stranded in the Middle East. Singapore Airlines has added flights to London, while Qantas Airways increased trips to Europe, routes typically served by Gulf airlines.
Qantas is also shifting larger aircraft from US routes to Europe, where demand has risen. Smaller carriers, however, face greater challenges, particularly those operating older, less fuel-efficient jets. "They are navigating a crisis with fewer levers to pull," Terry said.
"The rise in fuel prices will be toughest for smaller airlines, especially those that fly older jets that are less energy efficient."
Bryan Terry, Alton Aviation Consultancy
