Photo: Air Busan

 

 

[Alpha Biz= Paul Lee] South Korea’s low-cost carriers (LCCs) are reducing flight operations on select international routes as rising oil prices and a weaker Korean won—driven by escalating tensions in the Middle East—weigh on costs.

Air Busan has announced the suspension of several international routes from Busan in April, including flights to Guam, Cebu, and Da Nang. Aero K, based at Cheongju International Airport, also plans to scale back operations on routes such as Clark and Ulaanbaatar.

While airlines have officially described the changes as “adjustments to business plans,” industry observers say the move reflects mounting cost pressures from higher fuel prices and exchange rates.

Aviation fuel accounts for roughly 25% to 35% of airline operating costs, and as transactions are largely conducted in U.S. dollars, a combination of rising oil prices and currency depreciation significantly increases the financial burden.

Full-service carriers such as Korean Air and Asiana Airlines have not yet considered cutting routes, but other LCCs are expected to follow with similar measures.

Unlike major carriers, which have hedging strategies to mitigate risks from fuel prices and currency fluctuations, LCCs have more limited capacity to absorb such shocks.

Industry analysts expect airlines to reduce less profitable long-haul routes in the near term and shift focus toward high-demand destinations such as Japan and Jeju Island.

 

 

 

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