South Korea’s aviation industry is currently reacting to the economic shocks of the conflict in the Middle East. Since the start of the war on February 28, Brent crude oil has risen more than 50% to more than $110 a barrel. By March 20, jet fuel prices reached nearly $200 a barrel, more than doubling from February. South Korea is particularly at risk due to its heavy reliance on oil and gas imports from the Gulf region.
In response, Vice Chairman Wu Ki-hong told staff members, “We are planning to switch to an emergency management system in April to prepare for rising costs due to increased fuel expenses.” The airline is attempting company-wide cost efficiency through oil price-linked measures.
“These steps are not just a one-time cost-cutting initiative, but an opportunity to strengthen our structural foundation,” he said. To this end, the airline has been transitioning to an emergency management system since April to protect against rising expenses. Leadership sees these changes as helping strengthen the company’s long-term resiliency.
Given the ongoing regional conflict, South Korea is particularly vulnerable in terms of energy supplies as it is heavily dependent on oil and gas from the Gulf. As a result, the country’s major carriers—including Korean Air, Asian Airlines and Busan Air—have entered emergency management mode. As of Tuesday, energy prices continued to rise, with Brent crude trading at more than $113 a barrel.
