Korean Air takes emergency action as fuel prices soar
A Boeing 747 passenger aircraft, operated by Korean Air Lines, on the tarmac outside the company's hangar at Incheon International Airport
[Getty Images]

Korean Air says it is moving into emergency management mode to buffer the impact of surging jet fuel costs as the global economy is rocked by the ongoing US-Israel war with Iran.

A spokesperson for the national flag carrier said on Tuesday that it will implement "internal cost-reduction measures" to manage its finances to ensure the firm's "stability amidst rising fuel prices and global economic uncertainty".

Since the Iran war started on 28 February, Brent crude oil has risen by more than 50% to over $110 (£83.33) a barrel, sending the cost of jet fuel sharply higher.

Employees of the country's largest airline were first notified about the measures in a memo that has been seen by the BBC.

Vice Chairman Woo Ki-hong told staff members "we plan to switch to an emergency management system" in April to "prepare for rising costs due to a surge in fuel expenses".

The airline will "pursue company-wide cost efficiency" through measures based on the price of oil, Woo said.

The moves are "not merely one-time cost-cutting initiative but rather an opportunity to strengthen our structural foundation", he said.

South Korea is particularly vulnerable to disruptions to energy supplies from the Middle East as it is heavily reliant on oil and gas from the Gulf.

The country's second-largest carrier, Asiana Airlines, and budget airline Busan Air have also entered emergency management mode.

All three airlines are owned by the South Korean conglomerate Hanjin Group.

The average price of jet fuel rose to nearly $200 (£151.45) a barrel on 20 March, more than double what it was in February, according to the latest International Air Transport Association figures.

In Asia trade on Tuesday, energy prices edged up, with Brent crude rising by 0.3% to just over $113 a barrel.

The price of US-traded oil rose 0.2% to $103. On Monday, it closed above $100 a barrel for the first time since the conflict began.

Additional reporting by Leehyun Choi in Seoul

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