MAG accelerates fleet renewal as fuel costs surge amid global energy volatility

MALAYSIA Aviation Group (MAG) is accelerating its long-term fleet renewal strategy with an order for approximately 95 new aircraft, as the national airline group moves to reduce fuel consumption and cushion the impact of heightened global fuel price volatility.

MAG President and Group Chief Executive Officer Captain Nasaruddin A. Bakar said 27 of the aircraft have already been delivered, with the remaining jets scheduled to enter service progressively over the next four years.

He said the new fleet forms a key pillar of the group's strategy to improve operational efficiency, particularly in reducing fuel consumption, one of the aviation industry's largest operating expenses.

"Fuel costs account for around 30 per cent of Malaysia Airlines' total operating expenditure. However, following the geopolitical conflict that began at the end of February, fuel costs increased by approximately 50 per cent.

"MAG therefore needs to ensure operating costs remain under control by improving fuel efficiency through the introduction of new aircraft capable of reducing fuel consumption by up to 15 per cent.

"The actual savings depend on the aircraft type, but the primary objective is to lower fuel-related operating costs," Berita Harian reported him saying today.

To further mitigate rising fuel costs, Nasaruddin said MAG has strengthened its fuel hedging strategy, which currently covers about 36 per cent of the airline's fuel requirements, helping to cushion the impact of market volatility.

"Fuel hedging helps us mitigate the impact of rising prices. We also align our ticket pricing with prevailing market rates together with other airlines in the region and globally," he said, adding, Malaysia Airlines has adjusted fares by between 20 and 30 per cent in line with wider industry trends as carriers respond to increased operating costs.

Despite higher fares, demand has remained resilient, particularly on long-haul European routes.

"We saw strong demand, especially for Europe, particularly London. Based on demand at the time, we increased flight frequencies," he said on the airline's average load factor which currently stands at around 84 per cent, with some routes recording occupancy levels of up to 95 per cent.

Looking ahead, Nasaruddin said MAG will continue prioritising cost discipline, operational efficiency and fleet modernisation to strengthen the group's competitiveness while maintaining service quality amid an increasingly uncertain global operating environment. - June 29, 2026