KUALA LUMPUR (April 8): Shares of Capital A Bhd (KL:CAPITALA) and AirAsia X Bhd (KL:AAX) rose on Wednesday as oil prices fell following a two-week ceasefire between the US and Iran.

Lower cost of fuel, which usually accounts for about one-third of an airline’s operating expenses, is expected to ease pressure on the bottom line, Maybank Investment Bank analyst Samuel Yin Shao Yang, who covers both AirAsia X and Capital A, told The Edge.

“There could be a lag of a couple of weeks before any impact is seen on jet fuel prices,” he said. “Much depends on how the talks hold, but this should help ease pressure on AirAsia X’s financial positions.”

Capital A gained 8.14% or 3.5 sen to 46.5 sen in morning trade — its highest level in nearly three weeks — while AirAsia X jumped 13 sen, or more than 10%, to a two-week high of RM1.29, with 29.37 million shares traded.

Oil prices dived below US$100 (RM402.95) per barrel after President Donald Trump agreed to suspend US attack for two weeks while Iran said safe passage through the waterway will be possible during the window.

Investors are betting that lower jet fuel prices, which had more than doubled to above US$200 per barrel since the war’s outbreak in March, and easing geopolitical tensions will revive air travel while helping to keep a lid on inflation.

AirAsia X chief executive officer Bo Lingam told reporters this week that the discount airline has raised overall fares by 30% to 40% amid soaring jet fuel prices. The fuel surcharge alone — imposed to offset higher fuel costs — has increased by up to 20%.