KUALA LUMPUR (Aug 14): AirAsia Group Bhd (KL:AAGB) has seen the brunt of the impact from the Iran war as jet fuel prices normalise to pre-war levels, according to Maybank Investment Bank.
AirAsia Group reported a headline net loss of RM527.2 million in the second quarter ended June 30, 2026 (2QFY2026), but Maybank believes the worst is likely behind the aviation group.
The research house widened its FY2026 core net loss estimate to RM335.0 million, from RM187.6 million previously, after accounting for core net loss of RM293.2 million in the first six months of the year.
"This implies a narrower 2HFY2026 core net loss of RM41.8 million.
"Otherwise, our FY2027 and FY2028 core net profit [forecasts] are little changed. Our FY2027 and FY2028 core net profit [forecasts] are based on jet fuel prices normalising to US$85 per barrel," said Maybank IB in a note, which kept its 'buy' call on the stock, with a target price of RM1.81, implying an 81% upside.
In another note, HLIB Research expects a strong demand recovery in 4QFY2026, driven by rising inbound demand from China and intra-Asean markets.
"While the trajectory of the Iran war remains difficult to predict, we believe the market and air travel demand are gradually adjusting to the ongoing geopolitical uncertainties.
"We see the current share price as an attractive entry point ahead of a potential 4QFY2026 earnings recovery.
HLIB, though maintaining its 'buy' call, cut its target price for AirAsia Group to RM1.86 from RM2.20 previously.
In a separate note, PublicInvest Research noted the average jet fuel price climbed 93% year-on-year (y-o-y) to US$183/barrel in the second quarter.
At the same time, AirAsia Group’s cost per ASK rose 23% y-o-y to 22.72 sen, even as the group rolled out proactive fleet and network adjustments to contain costs.
The house noted that the group shifted to a “margin over volume” approach, alongside proactive fleet management, network realignment, and aggressive fare hikes in an effort to combat the hiked fuel prices in 2QFY2026.
The group has temporarily suspended some routes and strategically reduced its capacity by 11% in the second quarter compared to the same period in 2025.
As such, PublicInvest cut its FY2026-FY2028 earnings forecasts by an average of 27% to account for weaker demand, capacity reduction and lower yields.
Subsequently, it kept its 'neutral' call on the stock and lowered its target price to RM1.05 (from RM1.29) based on seven times FY2027 estimate.