With the Middle East crisis heightening jet fuel supply risks, Asian airlines are taking action, to cope with supply instability and rising costs, from cutting flights to raising fares.

Jet fuel — which accounts for about 25-30 percent of airline operating costs — saw average prices fall 6.7 percent to $184.64 per barrel in the week ending April 17 after hitting over $200 earlier this month, according to the price monitor of the International Air Transport Association.

This is more than double the approximately $90 per barrel before the US-Israeli war on Iran started on Feb 28.

Japan Airlines and All Nippon Airways, Japan's two largest airlines, said on Monday that they will double their international fuel surcharges from May 1.

South Korean carriers also raised fuel surcharges for May to the highest level in the country's history, reaching Level 33 for the first time, up from Level 18 in April.

This marked the steepest month-on-month increase since the current system was introduced in 2016, according to Yonhap News Agency.

With the new price hike, taking Korean Air, the country's largest full-service carrier, for a one-way long-haul trip to New York would require a fuel surcharge of 564,000 won ($383), up over 80 percent.

One of the world's biggest jet fuel exporters, South Korea has been focusing on domestic use and nearly suspended exports, according to Korea JoongAng Daily.

"While we have several months of crude oil reserves, our capacity to process it into jet fuel for export has reached its limit," said Lee Hwi-young, a professor in the Department of Airline Service Management and Logistics Systems at Inha Technical College in South Korea.

Lee told China Daily the export network might only return to normal around the end of this year, depending on the result of the US-Israeli war on Iran.

Though the country has been working to secure alternative crude oil sources, Lee said establishing a stable supply network takes time.

He said it will take at least three months, or more likely six to seven months, before South Korea returns to normal export levels seen before the Iran war.

This is expected to affect its major buyers, especially the United States. According to S&P Global Commodities at Sea data, South Korea accounted for over 82 percent of jet fuel imports to the US West Coast.

Jet fuel shortages are constraining aviation capacity across Asia, with Southeast Asia being the most exposed to a tourism-related hit, according to an April 15 report by the British think tank Oxford Economics.

Aviation downturn

"The Philippines and Thailand appear most exposed to a jet fuel-triggered aviation downturn given the importance of international arrivals to GDP and employment," the report said, adding that airlines in Vietnam, Malaysia and Indonesia have cut flights as fuel stocks dwindle.

Thai Airways said it will cancel flights and reduce frequencies on 46 domestic and international routes across Asia and Europe in May, affecting services connecting Bangkok with destinations such as Beijing, Singapore and Seoul.

The Civil Aviation Authority of Vietnam estimated that if fuel prices remain around $200 per barrel, airline operating costs could rise by about 40 percent compared to prewar levels.

Lee, from Inha Technical College, said the current uncertainty in jet fuel supply and the subsequent increase in fuel surcharges would place low-cost carriers at the biggest risk.

"Since low-cost carriers rely on price-sensitive travelers rather than stable business demand, some could face a dangerous survival situation if this persists for six months to a year," said Lee.

While flight cancellations are already happening in Asia, IATA Director-General Willie Walsh said on April 17 that there could be some cancellations in Europe due to a lack of jet fuel by the end of May.

The IATA has also said that even if the Strait of Hormuz returns to normal operation, jet fuel prices could take months to normalize.

kelly@chinadailyapac.com