KUALA LUMPUR (Sept 4): Malaysia Aviation Group said on Friday it will continue to hedge its fuel costs in 2027 as it grapples with soaring jet fuel prices.

The jump in jet fuel prices had “significant pressure” on its finances, prompting the owner of national flag carrier Malaysia Airlines to make a 5% “surgical cut” in its destinations, president and chief executive officer Captain Nasaruddin A Bakar said at a press conference.

“We will continue to monitor demand and market conditions daily to determine the appropriate markets and routes to maintain the group's financial performance,” he said.

Fuel accounts for about 40% of Malaysia Aviation Group’s total costs with every US$1 increase in fuel prices translating into an estimated RM50 million increase in its annual costs.  

Malaysia Aviation Group has so far received 26 aircraft, comprising Boeing 737-8 and Airbus A330neo aircraft, under its fleet modernisation programme.

“We believe this initiative gives us greater capability, better reliability and capacity to serve our markets more effectively,” Nasaruddin noted.

On Friday, Nasaruddin also announced that Malaysia Airlines will resume flights between Kuala Lumpur and Busan, South Korea, from Dec 2 after a nearly three-decade hiatus.

The airline will operate four direct flights a week on Tuesdays, Wednesdays, Saturdays and Sundays, using Boeing 737-8 aircraft. Malaysia Airlines last operated the Kuala Lumpur-Busan route between 1996 and 1998.

The move complements Malaysia Airlines’ existing services to Seoul, giving passengers more options to travel to South Korea, Nasaruddin noted.

Firefly, the company’s low-cost carrier, will soon expand its international network into China with the launch of direct flights to Kunming using Boeing 737-800 aircraft, he added.