Korean Air Short-Haul Fuel Surcharges Outpace Costs
An analysis has found that consumers traveling on short-haul Korean Air routes to Japan and China are paying fuel surcharges that are more than 30% higher than actual fuel consumption would warrant. The gap stems from changed operating conditions, including improved fuel efficiency and higher load f
A recent analysis reveals that passengers flying on short-haul Korean Air routes to Japan and China are being charged fuel surcharges that are significantly higher than what the actual fuel consumption would require. The discrepancy arises because the carrier's surcharge standards have not been updated in nearly a decade, despite improvements in fuel efficiency and higher load factors on its flights.
The Price Watch Center of the Korea National Council of Consumer Organizations conducted the study, examining operating performance and fuel consumption data from 426 flights on four specific routes - Fukuoka, Qingdao, Shanghai, and Tokyo - between July 16 and August 15 this year.
Fuel surcharges are determined by multiplying fuel consumption per passenger by the difference between fuel prices and a benchmark oil price. Although advancements in aircraft efficiency and increased passenger capacity have reduced per-passenger fuel consumption, Korean Air has maintained the same surcharge standard table since 2016.
The council recalculated the charges using current operating data, finding that the appropriate fuel surcharge should have been 57.5% to 87% of the actual amount charged. On average, the recalculated amount was about 30.1% lower than the actual surcharge.
Disparities in surcharge amounts were particularly notable on certain routes. For instance, on the Incheon-Fukuoka route, the actual surcharge was $32, but the recalculated estimate was $18.41. Similarly, on the Incheon-Qingdao route, the actual surcharge was $32, but the estimated amount was $22.05. The Shanghai and Tokyo routes also showed a lower discrepancy, at $14.8 and $5.74, respectively.
Furthermore, the council highlighted an added burden on consumers due to the conversion of fuel surcharges from U.S. dollars to Korean won. The airline's exchange rate applied to these surcharges was higher than the average exchange rate for the same period, resulting in consumers paying more than the actual value. The Korea National Council of Consumer Organizations emphasized that Korean Air should promptly update its fuel surcharge calculation system to accurately reflect actual fuel consumption and ensure a fair distribution of costs between passenger and cargo transport.
Written by urgent.news from BusinessKorea's reporting — not their text. Machine-written — may contain errors; check the original before relying on it.
