High Oil Prices Take Toll on Firms

According to the Korea Chamber of Commerce and Industry (KCCI), which in May surveyed 627 firms in the metropolitan area, 63.2 percent of local companies said they would have to halt business operations if international oil prices surpass $80 a barrel.

Worse, about three quarters of respondents said they have no effective countermeasures against volatile oil prices.
Among the hardest hit are airlines. Their jet fuel costs are soaring, reducing earnings.

Asiana Airlines, Korea’s second largest airline, said it has eliminated or reduced unprofitable routes and is testing flights carrying a minimum amount of fuel.

As the airline needs to raise ticket prices to deal with high oil prices, the company expects some profit loss and a decline in passengers this year.

Hyundai Motor, Korea’s largest auto manufacturer, said that because of high oil prices and the additional burden of a labor dispute, it is refraining from making investments and expenditure.

Korea Times