KUALA LUMPUR (April 10): PublicInvest Research has cut its financial year ending Dec 31, 2026 (FY2026)-FY2028 earnings forecasts for AirAsia X Bhd (KL:AAX) by an average of 46.8% to reflect weaker passenger growth and yields driven by the impact of the US-Iran war.

The firm expects FY2026 net profit of RM308.6 million, down from RM1.96 billion in FY2025.

The earnings cuts led to a 34% cut in its target price to RM1.85 from RM2.80 previously.

The firm, in a note on Friday, said it however maintained its 'outperform' rating on AirAsia X after a recent briefing, saying it is more confident in the airline’s near-term outlook despite higher airfares driven by surging fuel costs.

It said AirAsia X remains resilient even as jet fuel prices spike due to the Middle East conflict, with crude oil reaching US$118 (RM467.46) per barrel and jet fuel rising to about US$200 per barrel, up from US$90 before the war. Refining costs have also surged more than 350% year-on-year.

PublicInvest highlighted that to manage costs, AirAsia X has raised fuel surcharges by about 20%, increased airfares by 30% to 40% depending on routes, cut about 10% of flight capacity, reallocated flights to stronger routes, improved fleet efficiency and accelerated newer aircraft adoption, and used Fly-Thru connectivity to boost passenger loads. It has also benefitted from stronger Asean currencies to offset US dollar fuel costs.

The firm noted that AirAsia X is also investing in its Bahrain Gulf hub, signalling long-term growth plans even amid near-term pressure.

Overall, analysts remain positive, with all covering research houses maintaining 'buy' calls and an average 12-month target price of RM2.13.

AirAsia X’s share price was up 0.84% to RM1.20 at Friday's midday break, valuing the company at RM4 billion. Year to date, the stock is down 33%.

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