T’way Air has begun accepting applications for unpaid leave from cabin crew, marking its first such program since August 2024, according to industry sources Monday.
The airline said the move is intended to manage crew fatigue and adjust workloads following schedule changes. Industry officials, however, say it reflects mounting financial strain as the U.S.-Iran conflict drives up fuel costs and pressures the currency.
T’way Air had already declared emergency management mode on March 16, becoming the first domestic carrier to take such action amid the crisis.
The carrier has posted operating losses for two consecutive years, with a 12.3 billion won ($8.3 million) loss in 2024 widening sharply to 265.5 billion won in 2025, as higher fuel costs, exchange rate volatility and weakening demand compound its challenges.
The strain is spreading across the low-cost carrier (LCC) sector.
Data released by the office of Rep. Park Yong-gap showed that international flights operated by nine domestic LCCs fell from 40,111 to 39,006 in the month following the outbreak of the conflict, while cancellations rose from 479 to 604.
Some carriers saw steeper pullbacks. Jin Air cut mid-haul flights by 27.7 percent, while T’way Air reduced operations by 12.6 percent but posted a cancellation rate of 31.2 percent.
Cost pressures are being amplified by currency swings. Airlines typically pay for fuel, aircraft leases and maintenance in U.S. dollars, leaving them highly exposed to exchange rate volatility. The dollar has averaged close to 1,500 won in April, the highest since the 2008 global financial crisis.
Jet fuel prices have also spiked, with Singapore benchmark aviation fuel rising to around $197 per barrel—more than double pre-conflict levels near $90—making it increasingly difficult to sustain marginal routes.
Full-service carriers are not immune. Korean Air saw its long-haul cancellation rate jump from 0.2 percent to 3.9 percent after the conflict, largely due to airspace closures over Dubai and subsequent route adjustments.
The government has begun preparing support measures. The Ministry of Land, Infrastructure and Transport issued a “concern” level resource security alert and launched a crisis response task force, while considering administrative support such as temporary relief on financial restructuring requirements.
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