2024-04-16 17:08:13
Iran fires 200 missiles targeting Israel
Korean Air’s return to Tel Aviv difficult to predict
There are also concerns about rising oil prices… Petrochemicals overlapping with adverse factors
As military risks such as the possibility of escalation of war have been triggered by Iran’s military attack on Israel, the domestic aviation and petrochemical industries are also weighing the impact on their performance. In particular, as oil prices are inevitable to rise in the future, a negative impact is expected on these industries.
According to the industry on the 16th, Israeli military chief spokesman Daniel Hagari said that Iran launched more than 200 missiles and drones targeting Israel from the night of the 13th (local time) to the morning of the 14th.
Although the domestic aviation industry does not fly into Israeli or Iranian airspace, it is directly and indirectly affected.
In particular, Korean Air was the only airline in Korea to operate a direct route to the Middle East (Incheon-Tel Aviv), but has suspended operations for over half a year since the conflict between Israel and Hamas broke out in October last year. This time, the possibility of an escalation of war due to Iran’s attack on Israel increases again, and there is an atmosphere that restarting the ship will be difficult for the time being.
A Korean Air official said, “It is difficult to accurately predict when the flight will return to service,” and added, “We will monitor the current situation and keep an eye on whether it will return to service.”
Due to Middle East risks, some even predict that international oil prices will exceed $100, and the industry appears to be struggling even more. As the biggest cost in the aviation industry is fuel costs, when international oil prices rise, the cost burden also increases.
It is known that Korean Air will incur an operating loss of $31 million if oil prices rise by $1 per barrel. Internally, volatility is reduced using ragging (payment delay effect), but it cannot fundamentally protect against rising oil prices.
Another problem is that if international oil prices rise, it may have a negative impact on passenger demand. Moreover, despite the recent rise in international oil prices, Korean Air froze fuel surcharges in May at 10 levels (minimum 21,000 won to maximum 161,000 won).
The petrochemical industry is also expected to face great difficulties because the price of raw material (naphtha) is affected by the rise in international oil prices. Petrochemical companies mainly produce ethylene and plastics using naphtha extracted from crude oil as the main raw material.
According to the Ministry of Trade, Industry and Energy, the price of naphtha per ton rose 9.1% from $657 in January to $717 this month. However, if international oil prices rise in the future, the cost burden may increase.
In particular, at a time when the overall petrochemical industry is experiencing a long-term slump due to oversupply from China, the industry’s concerns may increase further due to the negative factors of the recent oil price increase. The operation rate of domestic naphtha cracking facilities has been falling for two consecutive years, falling to 74% last year.
An industry official said, “If raw material prices rise due to the rise in oil prices from the Middle East and logistics freight costs increase, profitability will greatly deteriorate,” and added, “We will respond by watching the possibility of an escalation of war in the Middle East in the future.”
[서울=뉴시스]
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2024-04-16 17:08:13