"Honey, Should We Travel Abroad with 430,000 Won Saved?"... Fuel Surcharges Drop Sharply as War Ends

Fuel surcharges drop following news of end-of-war agreement

July fuel surcharges to fall by 20% ahead of peak summer season

Travel industry anticipates a "boost" during the high season

"Second-half travel demand expected to rise aroun

Expectations are rising that international travel sentiment will rebound as the international fuel surcharge for airlines drops significantly following the ceasefire agreement between the United States and Iran. With the peak summer vacation season approaching, there are projections that travelers’ burdens will ease, and that demand for travel will recover in the second half of the year, particularly starting with the Chuseok holiday.

According to the travel industry on June 16, package tour reservations for July and August at Hanatour currently show that China and Japan account for more than half of all bookings. Prior to the war, these two countries made up less than half of the total, but as demand for short-haul travel increased due to the war, their share rose significantly. In terms of year-over-year growth, China and Japan have seen an increase, whereas Southeast Asia, Europe, and the Americas have experienced a decline.

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When the United States-Iran war broke out in February, fuel surcharges rose sharply, which led to increased demand for short-haul overseas travel, especially to China and Japan. Notably, during the Golden Week holiday in May, there was a significant surge in travel demand to major Chinese tourist destinations such as Zhangjiajie and Baekdusan, as well as natural scenic areas and major cities like Shanghai and Qingdao.

For Modetour, bookings for long-haul destinations dropped by 30% year-over-year immediately following the outbreak of war, as travelers faced high exchange rates and fuel surcharges. From January to May this year, the number of outbound package travelers at Modetour increased by about 2% compared to the same period last year. While a base effect was expected due to last year’s declines—caused by martial law, impeachment, and airline disasters—travel demand has not recovered significantly because of the lingering effects of the war.

However, the travel industry grew more optimistic on June 15 (local time) as news broke of the ceasefire agreement between the United States and Iran. In particular, with international oil prices dropping on that day, the fuel surcharge on international flights issued next month is expected to decrease significantly, leading to a gradual recovery in demand for long-haul travel. It is also expected that demand will continue to rise moderately, especially for short-haul routes and family resort destinations.

Airlines have announced that, due to falling international oil prices, fuel surcharges on international tickets issued next month will be lowered by more than 20%. For tickets issued next month, the fuel surcharge will be set at level 19, which is 8 levels lower than the level 27 applied this month. The fuel surcharge, which soared to a record-high level 33 in May due to the Middle East war, has now declined.

Accordingly, Korean Air imposed a minimum surcharge of 61,500 won and a maximum of 451,500 won per one-way ticket this month, but plans to reduce these to between 46,400 won and 344,000 won next month.

By route, the fuel surcharge for the shortest flights—such as Incheon to Shenyang or Qingdao in China and Fukuoka in Japan—will decrease by 15,100 won. For longer routes such as Incheon to New York, Dallas, Boston, or Washington in the United States, the surcharge will drop by 107,500 won. For a family of four, this means a reduction in fuel surcharges ranging from at least 60,400 won to as much as 430,000 won.

The travel industry believes this reduction in fuel surcharges is larger than expected. A Hanatour representative explained, “We expect the decrease in fuel surcharges to be even greater in August and September, and believe that the recovering travel sentiment will lead to increased demand. While it may be difficult for short-haul demand to shift immediately to long-haul travel, as concerns such as war subside, the balance may gradually change.”

However, the industry notes that it will take a few more days for the ceasefire agreement between the United States and Iran to be officially signed, and that the high exchange rate remains a variable. One industry insider commented, “Long-haul travel requires consideration of multiple factors such as exchange rates, airline seat availability, and holiday schedules. Therefore, rather than seeing a sudden surge in July bookings, there is a greater possibility of a gradual recovery centered on demand for the Chuseok and winter seasons in the latter half of the year.”

This content was produced with the assistance of AI translation services.