AirAsia expects modest fare hikes but maintains low-cost positioning

CAPITAL A chief executive officer, Tan Sri Tony Fernandes, said AirAsia fares may see a modest increase while remaining affordable, following the conflict in West Asia.

He said that the low-cost carrier will not cancel flights amid rising crude oil prices, as demand remains strong.

“We will not be cancelling flights as demand is good. We are doing our best to keep fares as low as possible, but we will require support from other parts of the aviation ecosystem,” Fernandes told a press conference here today.

He said higher fuel costs will inevitably lead to fare adjustments, but AirAsia aims to keep increases lower than those of its competitors.

“Fares will have to go up; there is no two ways about it, but our fares will increase much less than others,” said Fernandes.

According to Bernama, he said that despite cost pressures, AirAsia remains able to operate and absorb part of the burden, supported by reduced flight capacity from Gulf carriers.

“Demand is good, we can continue operating and absorb these additional costs as flight capacity from the Gulf region, such as Emirates, Etihad, and Qatar, has decreased by around 15 to 20 per cent of seats,” said Fernandes.

He said that the reduction in capacity offers ASEAN countries the chance to establish themselves as alternative aviation hubs in the region.

However, rising costs should not be borne by airlines alone, but require collective efforts across the industry, said Fernandes.

“The burden cannot be shared by the aviation industry alone. Fuel companies must also play their part. Airports have to play a part. Other supply chains have to play a part.

“It is a wonderful opportunity to build a hub and do all these extra things. The great thing about this is all airlines will work together, which is fantastic,” he said.

Fernandes said the aviation industry has weathered even greater challenges during the COVID-19 pandemic, expressing confidence that the company can navigate the current situation through innovation and strategic measures. – March 30, 2026