After surviving the Covid pandemic, when International travel was stopped and domestic flights were severely curtailed, AirAsia, like almost all airlines, has now been affected by the high and volatile jet fuel prices caused by the Middle East ongoing war. Speaking in Bangkok on 18th September, Bo Lingam, Group CEO of AirAsia Group reaffirmed the Group’s confidence in its business and long-term strategy. He says AirAsia Group Berhad (formerly known as AirAsia X Berhad) (“AirAsia”, or the “Group”) is focused on taking a prudent approach in the current operating environment.
Airlines globally continue to face geopolitical uncertainty and industry-wide fuel volatility, cost pressures and shifting market dynamics. While not unique to AirAsia, the Group’s resilient low-cost model enables it to be nimble in responding to different challenges, which they can combine with dynamic fare pricing and growth in revenue from ancillary businesses. As an aside, Santan, their food and beverage brand, is now available on KTMBs long distance electric trains (ETS) and can be purchased online. These help absorb these industry-wide pressures as AirAsia remains focused on long-term growth.
Group CEO Bo Lingam made mention of recent media speculation, which he described as inaccurate, stating that the Group is committed to business continuity and continuing to serve their guests.
…. We have been through many crises before in our 25-year journey, with Covid-19 being by far the most challenging. What is different today is that people can still fly and travel continues. Given the current environment, we are taking a disciplined approach to managing the business – adjusting capacity, controlling costs, having active discussions with key stakeholders and strengthening our resilience.
He added that AirAsia recovered around 70% of fuel price increases through dynamic fares and lower non-fuel operating costs in the second quarter of 2026 and tactically reduced capacity by 20-25% in the third quarter, traditionally a weaker travel period in the region. They are now preparing to ramp capacity back towards pre-war levels in the fourth quarter, aligning with the region’s peak year-end travel season.
Fleet optimisation
Many aircraft in AirAsia’s fleet are older, less efficient models. It’s therefore prudent to return 25 older, less fuel-efficient aircraft on favourable commercial terms, reducing its fixed lease burden, while accelerating the transition towards more efficient narrowbody aircraft.
You may have noticed that the big X has disappeared from the tails of their A330 aircraft. This results from consolidation of the Group’s short and long-haul operations now under one Group, giving the airline greater flexibility to optimise aircraft and capacity across its network, with a stronger focus on route profitability and sustainable returns.
He also addressed queries about capital and financing requirements, noting that the Group’s planned fundraising exercises are primarily targeted at debt restructuring, refinancing and balance sheet consolidation to optimise its long-term capital structure, rather than solely funding operational shortfalls.
With no clear end to the on-going fuel situation affecting all airlines, AirAsia has shown an ability to adapt, adjust and find a way forward in a demonstrable manner. They are also preserving operational stability through active, ongoing engagements with their key partners including their airport bases, particularly KLIA T1, their main hub. The strength of their network is evident in Kuala Lumpur International Airport (KUL)’s recent recognition as the world’s fourth most connected international megahub and No. 1 low-cost megahub*, a position it has held since 2023, with AirAsia as the dominant carrier behind this connectivity. * OAG Megahubs 2026 report, Official Airline Guide (OAG), 2026.
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