Record-breaking fuel surcharges make return to normal expensive

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Record-breaking fuel surcharges make return to normal expensive

Published: 09 Jun. 2022, 18:43 Updated: 09 Jun. 2022, 19:01

Airplanes wait at gates at Incheon International Airport. [YONHAP]

Airline fuel surcharges, which are already breaking records, are expected to continue to rise.

It is highly likely that domestic and overseas air ticket prices will become more expensive next month.

Fuel surcharges are announced every month by airlines and have been hitting record highs since February. According to Korean Air Lines, fuel surcharges for international flights in June range from 37,700 won ($29.90) to 279,500 won on one-way flights.

Compared to May, when prices ranged from 33,800 won to 250,900 won, the upper range rose by 20,000 won, or 11.4 percent on month.

Compared to February this year, when the fuel surcharge went as high as 79,200 won, the upper range is up more than 200,000 won.

When customers book an international flight ticket this month on Asiana Airlines, they will have to pay a fuel surcharge of 40,400 to 229,600 won. In May, the carrier's fuel surcharge ranged between 35,400 and 197,900 won.

The Asiana Airlines Incheon-New York flight in January this year required a 64,000-won fuel surcharge, but this month, passengers have to pay close to 230,000 won.

Next month, when vacation season begins in earnest, fuel surcharges for international flights are expected to break records.

Airlines separately announce fuel surcharges for domestic and international flights. In general, domestic fuel surcharges are announced first.

The July fuel surcharge for domestic flights announced Tuesday by Korean Air Lines and Asiana Airlines was 19,800 won, up 12.5 percent from June. This is the first time that the fuel surcharge for domestic flights approached the 20,000-won level. It is higher than the all-time high of 17,600 won, recorded when international oil prices soared in 2008.

Korean Air Lines and other airlines are planning to announce the July fuel surcharge for international flights around the middle of this month.

"In general, domestic and international flights move together because fuel surcharges are set in conjunction with international oil prices," said an airline industry spokesperson.

Airlines are not happy with the steep rise in fuel surcharges. Various regulations, including restrictions on the number of arrivals for international flights, were lifted from Wednesday, but the recovery of passenger demand is slower than expected due to high airfares.

"High fuel surcharges do not help recover demand," said an airline industry spokesperson.

On Tuesday, West Texas Intermediate (WTI) for July ended at $119.41 per barrel, up 0.8 percent from the previous day. Goldman Sachs predicted that the average price of Brent crude oil would reach $140 a barrel between July and September considering oil prices rose sharply this summer.

The Jet Fuel Price Index (JFPI) has been rising this year.

According to the International Air Transport Association (IATA), the JFPI was on June 3 was 466.08, from a base of 100 in 2000. The JFPI, which hovered below the 300 line at the end of last year, has risen sharply since the beginning of this year, breaking through the 400 mark in March.

As the demand for travel is rapidly recovering in each country, there is also an abnormal phenomenon in which jet fuel prices exceed international oil prices. The price of jet fuel, which traded at $135 per barrel in March, broke $170 per barrel as of June 3. This means that the fuel surcharge that travelers have to pay will increase.

"The fuel surcharge is applied based on the reservation confirmation date, regardless of the boarding date," said Park Seon-mi, manager at Interpark Tour.

BY KANG KI-HUN [lim.jeongwon@joongang.co.kr]