Low Oil Prices... Domestic Flight Fuel Surcharge '0 Won' in June as Well

On the 29th, ahead of the golden holiday, the domestic terminal at Gimpo Airport in Gangseo-gu, Seoul, is bustling with passengers. In contrast, the departure hall of Terminal 1 at Incheon International Airport is quiet. Photo by Mun Honam munonam@

[Asia Economy Reporter Yu Je-hoon] As international oil prices continue to decline, fuel surcharges will not be applied to domestic flight tickets issued in June. Although the fare burden for passengers using domestic flights has decreased, the demand recovery after the golden holiday is not clear, making it unlikely to lead to profit improvement for national airlines.

According to the aviation industry on the 8th, the domestic fuel surcharge for June will be applied at level 0, the same as the previous month. This means that the domestic fuel surcharge will be zero for two consecutive months. Earlier this month, the domestic fuel surcharge dropped to zero for the first time in four years since 2016.

The domestic fuel surcharge is applied stepwise when the average price of Singapore jet fuel per gallon (3.785ℓ) is 120 cents or more; otherwise, it is not applied. The average price of Singapore jet fuel from April 1 to the end of April, which serves as the basis for the June domestic fuel surcharge, was 51.80 cents per gallon, well below the application threshold.

Generally, a reduction in fuel surcharges is considered good news for the aviation industry because it reduces the burden on passengers purchasing airline tickets. However, due to the ongoing "living quarantine" stage amid the COVID-19 pandemic and the increase in domestic flight supply by national airlines due to the suspension of international flights, the practical benefits are considered limited.

An industry official said, "Although it seemed crowded with about 200,000 tourists visiting Jeju during the golden holiday, it was merely a base effect compared to the period when COVID-19 was spreading," adding, "The actual flight occupancy rate at that time was around 60%, and the reservation rate after the holiday is expected to be even lower." Reporter Yu Je-hoon kalamal@

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