KUALA LUMPUR (March 30): AirAsia X Bhd (KL:AAX) is not cancelling flights as the aviation industry grapples with rising jet fuel costs triggered by the Middle East conflict, said its advisor Tan Sri Tony Fernandes.
Fernandes, who is CEO of Capital A Bhd (KL:CAPITALA), is also keeping the company’s existing target of developing a maintenance, repairs and overhaul hangar in Bahrain by the second half of 2026.
However, Fernandes stopped short of sharing details on AirAsia X’s recently announced plans to start flying its Kuala Lumpur-Bahrain-London route from June this year. Capital A owns 19% in AirAsia X, and provides a suite of services for the airline from plane maintenance to online booking.
“Next week, we will be having an aviation [business] update… on how we see the state of the aviation business,” Fernandes said at a media briefing on updates for Capital A’s operations.
“My number one concern is to try to keep fares as low as possible,” he said. “We will require help from other parts of the aviation ecosystem to keep fares lower.
“Fuel companies, airports have to play a part,” he said, adding that the group is in discussions with national oil firm Petroliam Nasional Bhd (PETRONAS) and airport operators on the matter, without elaborating further.
On aviation sector demand, Capital A’s online travel agent unit AirAsia Move has not seen much decline in bookings so far, Fernandes said, adding that the online travel agency is enjoying higher commission per booking due to higher ticket prices.
“Demand is good” as travellers in Asia stay in this part of the world due to the conflict,” he added. “We can recover the extra cost.
“A lot of capacity has been taken out in the Gulf, that’s 15(%) to 20% of airline seats,” Fernandes said. “Obviously cargo [capacity was affected] as well,” allowing Capital A’s air cargo unit Teleport to pass through any rise in fuel costs, he added.
“Covid-19 [pandemic] was far worse, we couldn’t fly during Covid. Now we can fly… on the assumption that we have oil,” Fernandes said.