Korean Air has announced it is entering emergency management mode following a rapid spike in fuel costs due to the impact of escalating tensions in the Middle East that are shaking the global economy.
A spokesperson for Korean Air stated that the company will implement internal cost-cutting measures to maintain financial stability amid ongoing economic uncertainty and rising energy prices.
This move comes after Brent crude oil prices increased by more than 50% since the conflict between the U.S., Israel, and Iran began in late February, with prices recently surpassing $110 per barrel, significantly raising jet fuel costs.
According to data from the International Air Transport Association, average jet fuel prices nearly hit $200 per barrel in March, more than doubling compared to the previous month.
Woo Ki-hong, Vice President of Korean Air, revealed in an internal memo to employees that the company plans to switch to emergency management starting in April to prepare for rising costs driven by fuel price increases, emphasizing that these measures are not just short-term cuts but aim to strengthen the organization's structure in the long term.
In addition to Korean Air, Asiana Airlines and Air Busan, both under the Hanjin Group, have also begun adopting emergency management measures.
South Korea is considered highly vulnerable to energy market fluctuations because it relies heavily on oil and gas imports from the Middle East region.
Analysts believe that if energy prices continue to rise, the global aviation industry could face increased pressures in costs, ticket pricing adjustments, and consumer travel demand in the near future.
. Source:BBC
Click to read news aboutInternational news