Korean Air to enter emergency management mode over soaring fuel costs

A Korean Air passenger plane is seen at Incheon International Airport's runway, April, 17, 2024. Korea Times photo by Shim Hyun-chul

Korean Air, Korea's flag carrier, will enter emergency management mode this week to respond to rising fuel costs and other worsening external conditions, according to industry sources Tuesday.

According to the sources, Korean Air Vice Chairman Woo Kee-hong posted an internal notice that it will implement an emergency management system starting Wednesday.

Woo said the decision was made to cope with rising costs driven by surging fuel prices due to the ongoing Middle East conflict. The company will implement phased response measures to improve cost efficiency, he added.

He warned that a prolonged period of high oil prices could seriously disrupt the company's ability to meet its business targets.

"The measures are not a one-off cost-cutting effort but are part of broader structural efforts to strengthen the company's fundamentals," Woo said.

Asiana Airlines Inc., the country's second-largest carrier and a Korean Air subsidiary, also entered emergency management mode last week.

The broader airline industry is facing growing pressure as jet fuel costs, which typically account for about 30 percent of total expenses, surge, while the Korean won continues to depreciate against the U.S. dollar.

Several low-cost carriers, including Jin Air and Air Busan, plan to reduce flights starting in April to minimize losses. Industry watchers predict more airlines to follow suit if the Middle East conflict persists.