Due to Falling Oil Prices... April International Flight Fuel Surcharge 'Zero'

Demand Recovery Seems Difficult Due to the Impact of COVID-19

[Image source=Yonhap News]

[Asia Economy Reporter Yu Je-hoon] Fuel surcharges will not be applied to international flight tickets issued next month. This is due to the recent decline in international oil prices following increased production in countries such as Saudi Arabia and Russia.

According to the industry on the 16th, the international fuel surcharge for April will be applied at level 0, two levels lower than this month. It is the first time in 31 months since May to September 2017 that level 0 has been applied to international fuel surcharges.

Fuel surcharges are generally imposed in stages when the average price of aviation fuel in Singapore exceeds 150 cents per gallon; otherwise, no surcharge is applied. From the 16th of last month to the 15th of this month, which is the reference period for next month’s international fuel surcharge, the average price of Singapore aviation fuel was $56.34 per barrel and 134.15 cents per gallon.

The international fuel surcharge is applied based on a distance-proportional tier system. Korean Air divides the flight distance into 10 sections ranging from less than 500 miles to over 10,000 miles and applies differential surcharges. This month, fuel surcharges ranged from 3,600 KRW to 19,200 KRW (level 9).

Domestic fuel surcharges will be applied at level 2, two levels lower than the previous month (2,200 KRW one-way). International fuel surcharges are imposed when the average price of Singapore aviation fuel is 120 cents or more per gallon from the 1st to the end of the previous month.

However, despite the 'zeroing' of fuel surcharges due to the drop in oil prices, the industry generally assesses that stimulating air travel demand will not be easy. This is because countries have strengthened entry restrictions on travelers from Korea due to COVID-19, and the rapid spread of COVID-19 abroad has caused travel demand itself to freeze.

This content was produced with the assistance of AI translation services.