Korean Air takes emergency action as fuel prices soar
5 hours ago
Osmond Chia,SingaporeandLeehyun Choi,Seoul
Korean Air says it is moving into emergency management mode to buffer the impact of surging jet fuel costs as the global economy is rocked by the ongoing US-Israel war with Iran.
A spokesperson for the national flag carrier said on Tuesday that it will implement “internal cost-reduction measures” to manage its finances to ensure the firm’s “stability amidst rising fuel prices and global economic uncertainty”.
It is the latest Asian airline to announce measures to deal with the economic impact of the Iran war.
The cost of crude oil has surged by more than 50% since the conflict began on 28 February, while global jet fuel prices have more than doubled.
Airlines have adopted similar emergency protocols to protect their businesses during crises like the Covid-19 pandemic, said Tan Chi Siang from consultancy PwC Singapore.
China Eastern Airlines, one of the country’s largest state-owned carriers, warned on Monday that global disruptions could weigh on its operations this year.
The airline said trade conditions and “geopolitical conflicts or wars will have a relatively significant impact” on the aviation sector, which could affect its performance.
Many Chinese airlines have raised their fuel surcharges on flights since the Iran war started.
Authorities have also reportedly ordered China’s oil refineries to stop exporting fuel in a bid to keep domestic prices under control.
In Hong Kong, Cathay Pacific said that a fuel surcharge has been included on all flights, with many of its fares rising sharply.
Japan is an international transport hub, as well as being a major manufacturer of plane parts.
All Nippon Airways (ANA) has said it will not be raising fuel surcharges for tickets issued in April and May as prices were set before the Iran war.
The immediate impact of rising energy costs is “limited” for now due to the existing surcharges and measures that the airline has taken to secure fuel prices in advance, a spokesperson for ANA said.
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