South Korean airlines cut flights as jet fuel prices cross $150 a barrel

South Korean airlines are reducing flights, delaying recruitment and scaling back operations as soaring jet fuel prices and a weakening won deepen financial pressure across the country’s aviation sector.

The latest carrier to suspend routes is Parata Air, a recently launched low-cost airline that had previously maintained full operations despite rising market instability. The airline will now halt several Southeast Asian services in June as operating costs continue climbing.

The move reflects broader strain across South Korea’s low-cost carrier market, where airlines are grappling with surging fuel expenses, unfavourable exchange rates and weakening profitability.

Parata Air reverses earlier decision to maintain full schedule

According to aviation industry sources cited in South Korean media, Parata Air will suspend its Incheon to Phu Quoc route from 17 June to 30 June.

The airline will also reduce operations on its Incheon to Da Nang service, cancelling flights on Mondays, Tuesdays and Fridays throughout June despite previously operating the route daily.

Passengers affected by the changes are being offered:

• Alternative flights to Da Nang or Nha Trang
• Earlier departures from Phu Quoc before 17 June
• Refunds and schedule adjustments

The airline’s July operating schedule remains under internal review.

Parata Air’s decision is particularly notable because the carrier had publicly resisted route reductions even as rival South Korean low-cost airlines began cutting capacity earlier this year.

In a statement published on its website until May, the airline said maintaining operations despite oil price and exchange rate volatility reflected a commitment to customer trust during its early launch phase.

Fuel prices and exchange rates intensify pressure

Industry analysts say the combination of sharply higher aviation fuel prices and currency weakness has created a difficult operating environment for South Korean carriers.

Jet fuel prices, which were reportedly trading around $99 per barrel before the escalation of conflict in the Middle East, have now exceeded $150 per barrel.

Fuel remains one of the largest cost components for airlines, accounting for roughly 30 per cent of total operating expenses.

At the same time, the South Korean won has weakened significantly against the US dollar, with exchange rates fluctuating near the 1,500 won level.

The currency pressure has amplified airline costs because many aviation expenses are dollar-denominated, including:

• Aircraft leasing payments
• Fuel purchases
• Maintenance contracts
• Engine servicing
• International operating costs

The combined impact has forced airlines to reassess route profitability and capacity deployment.

South Korean aviation sector enters emergency management phase

The operational cuts at Parata Air form part of a broader cost-reduction trend now spreading across the country’s aviation industry.

Several South Korean low-cost carriers have already introduced emergency management measures, including:

• Unpaid leave programmes
• Recruitment delays
• Route suspensions
• Reduced flight frequencies
• Internal spending controls

Airlines reportedly accepting applications for unpaid leave include:

• Jeju Air
• T’way Air
• Aero K

Meanwhile, Jin Air has postponed the start dates for approximately 50 newly hired cabin crew members who were originally scheduled to begin work this month.

According to industry reports, their onboarding has now been delayed until after the Chuseok holiday period.

Major full-service operators are also responding to deteriorating market conditions.

Asiana Airlines has reportedly declared emergency management measures and begun reducing unprofitable routes as cost pressures intensify.

Low-cost airlines face mounting financial losses

Internal estimates prepared by the Korea Airports Corporation reportedly forecast substantial losses for the country’s low-cost airline sector during the second quarter of 2026.

According to the estimates:

• Nine South Korean low-cost carriers are expected to post combined losses of approximately 383.5 billion won during the April-to-June quarter
• The figures exclude Korean Air, Asiana Airlines, and cargo-only operator AirZeta

The projected deficit underscores how rapidly operating conditions have deteriorated following the spike in oil prices and continued geopolitical instability.

Industry executives say newer airlines remain particularly vulnerable because they lack the financial buffers and operational scale available to larger carriers.

Southeast Asia routes become early casualty of cost pressures

Many of the first reductions are appearing on leisure-focused Southeast Asian routes, traditionally among the most competitive markets for South Korean budget airlines.

Routes connecting South Korea with destinations such as:

• Phu Quoc
• Da Nang
• Nha Trang

have historically relied on aggressive fare competition and high passenger volumes to remain profitable.

However, rising fuel costs are now forcing airlines to prioritise operational sustainability over market expansion.

Industry observers note that low-cost airlines typically operate with thinner profit margins than full-service carriers, making them particularly exposed during periods of fuel and currency volatility.

Airlines expected to continue reducing capacity

Aviation industry sources expect additional flight reductions and cost-control measures across South Korea’s airline sector if oil prices remain elevated through the summer travel season.

The ongoing Middle East conflict continues affecting global energy markets, while airlines also face broader operational challenges linked to slower demand growth and economic uncertainty.

Industry analysts say airlines are likely to continue focusing on:

• Capacity discipline
• Cash preservation
• Route profitability
• Workforce cost management
• Operational efficiency

For passengers, the reductions may lead to tighter seat availability and higher fares on some international leisure routes during peak summer travel periods.

For airlines, however, the current priority increasingly appears centred on financial survival rather than expansion as one of Asia’s most competitive aviation markets enters another period of turbulence.