International fuel surcharges fell in July after benchmark jet-fuel prices retreated from highs reached during the recent Middle East conflict, raising hopes that airfares could ease further later this summer.
For Korean Air, the July surcharge on international tickets was lowered to the 19th pricing tier from the 27th tier in June. The one-way surcharge on long-haul routes such as Incheon-New York fell to 344,000 won ($228) from 451,500 won a month earlier.
Industry estimates suggest August surcharges could fall by another six pricing tiers if Singapore jet-fuel prices remain near recent levels.
That relief, however, may come too late to meaningfully boost peak-season demand.
A Korean Air official said the airline will announce its August fuel surcharge on July 16 after calculating the average jet-fuel price through July 15.
Because many passengers traveling during the July-August vacation period have already purchased their tickets, any further reduction is expected to benefit travelers booking late-summer or autumn trips more than those flying during the busiest weeks.
While fuel costs are easing, airlines remain cautious about restoring the international capacity they cut when oil prices surged and the won weakened sharply.
According to publicly available industry tallies, South Korean low-cost carriers reduced more than 1,100 international round-trip flights following the Middle East conflict.
Jeju Air cut 187 international round trips during May and June, Air Busan reduced 212, Eastar Jet 150 and Jin Air 176, with most reductions concentrated on medium-haul routes such as Guam and Vietnam's Phu Quoc.
Those routes proved especially vulnerable because their longer flight times make airlines more exposed to fuel-price swings, while the won's prolonged weakness pushed up travel costs for Korean consumers visiting Southeast Asia.
Eastar Jet plans to operate 110 irregular flights between July and October on three routes linking Incheon with Datong, Nantong and Ningbo, adding more than 20,000 seats to capture demand from Chinese travelers during the summer school holiday.
Jeju Air is expanding flights to Japan, one of the strongest-performing outbound markets for Korean travelers. It will increase frequencies on its Incheon-Nagoya and Incheon-Matsuyama services to 21 weekly flights during July and August while adding flights on routes linking Incheon with Tokyo and Fukuoka as well as Busan with Osaka.
Jin Air has launched a new Busan-Miyakojima service, while Air Busan has introduced new routes from Busan to Shizuoka and Takamatsu.
The network changes highlight a broader industry strategy of prioritizing short-haul Northeast Asian destinations over longer Southeast Asian routes, where fuel costs and currency fluctuations continue to weigh more heavily on profitability.
The timing is significant because summer remains the busiest period of the year for international travel.
According to the Korea Tourism Organization, 4.86 million Koreans traveled abroad during July and August last year, accounting for about 16 percent of the year's 29.55 million outbound travelers.
Inbound tourism is even more concentrated during the season. South Korea welcomed 3.55 million foreign visitors during July and August 2025, representing nearly 19 percent of the year's 18.94 million arrivals.
Despite the seasonal demand, analysts say the second half of the year will depend less on passenger recovery than on whether airlines can restore profitability.
Adding flights means higher spending on fuel, airport handling, crews and maintenance, while carriers continue to contend with a stubbornly weak won, elevated financing costs and balance sheets still recovering from earlier liquidity strains.
Another risk is the return of fare wars.
As airlines compete for recovering summer demand, promotional discounts could help fill seats but also erode yields. If aggressive fare competition overlaps with the costs of restoring suspended routes, rising passenger numbers may not translate into stronger earnings.
"The recovery in travel demand is clearly encouraging, but profitability is a different story," an airline industry official said. "The challenge now is restoring capacity without sacrificing yields."
The result is likely to be an uneven recovery across the industry.
Carriers with dense networks to Japan and Northeast Asia appear better positioned to benefit from resilient short-haul demand, while airlines with heavier exposure to longer Southeast Asian routes may continue to face pressure even as jet-fuel prices retreat and international travel gradually recovers.
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