AirAsia X trimming costs, raising fares to deal with fallout from US-Israel war on Iran

AirAsia X said it was cutting routes, raising airfares and leaning on its founder’s sister companies as the US-Israel war on Iran continues. At a media briefing held Monday (6 April), founder Tony Fernandes said he “didn’t have all the answers on geopolitics”, but the current war has created a real “oil crisis but one we have many, many options to deal with.” “It is a crisis,” Fernandes said. “It’s nothing new to us.” He went to detail how the airline he founded actually once lost money when the price of oil went down because it was hedged the wrong way. Now, other AirAsia X executives said the airline can’t hedge because the market won’t let it. Airline executives said current stocks of fuel are available until June and it was reviewing its fuel operations daily. Some countries like Vietnam and Thailand have put restrictions on carriers and their fuel uplift at their national airports. Fernandes said the airline would “raise fares but keep them to as minimum as possible” in response to the US-Israel war on Iran, as well as “cut some capacity where we can’t cover the cost of fuel”. Fernandes said the airline would also work with companies associated with AirAsia X through their incorporation under the Capital A banner. That company holds MRO assets, its logistics arm Teleport is doing well and its Move platform is helping to sell ancillary products for Capital A. “People still want to fly,” Fernandes said. “The key difference between now and COVID is we can still fly and that gives us a lot of options.” Fernandes also said the airline remained committed to operating flights to Barhain and said the flights would commence in June if the war has ceased. He added the airline was maintaining its plans for fleet growth. “I hope the world gives peace a chance and some sensible behaviour comes out of this,” Fernandes said. “This war makes no sense to me…I hope that people in the world look at what caused this war and try to find some solutions instead of this escalation.” The airline said in a statement that “the group has proactively reallocated capacity towards stronger-performing and higher-yielding routes, such as Almaty (Kazakhstan), Tashkent (Uzbekistan) and Istanbul (Türkiye), to capture displaced demand, while also exploring opportunities to further develop key domestic hub in Senai, Johor Bahru. Bo Lingam, Group CEO of AirAsia X said in the company statment: “While we are operating in an increasingly challenging environment, we are seeing strong demand across our ASEAN destinations, which demonstrates the resilience of our network and the growing appetite for regional travel. This reinforces our focus on Kuala Lumpur as a key aviation hub and its position as a global low-cost carrier (LCC) megahub, connecting travellers seamlessly and affordably across the region. Amid ongoing geopolitical uncertainty and supply chain disruptions, global jet fuel prices have surged to more than double 2025 levels. In response, we have implemented carefully calibrated fare adjustments, including a one-off fuel surcharge across the network. We are optimising our network, reallocating capacity to stronger-performing routes and leveraging our Fly-Thru connectivity via Kuala Lumpur and Bangkok to capture demand efficiently. We are also actively negotiating with our key partners and stakeholders to contain costs across our operations. As we progressively reactivate our full fleet, our unit cost will improve, and the strengthening Asean currencies also act as a natural buffer against USD-denominated expenses.” Airline welcomes new chairman AirAsia X also welcomed Tan Sri Jamaludin Ibrahim as the Independent Non-Executive Chairman. Ibrahim said: “I’m excited to be joining AirAsia X, especially after the recent consolidation of all the seven airlines, short haul and medium haul, into one large cohesive group.  While we are experiencing a period of global uncertainty, we are entering this phase from a position of strength. The Group’s fundamentals are solid, supported by a lean and disciplined cost structure, a resilient Asean-focused network and robust Fly-Thru connectivity that allows us to respond quickly to market changes. I look forward to working closely with my fellow Board members, Bo and the AirAsia X management team to ensure operational agility and sound governance, as we continue to build on the strong foundation that has been laid. The current challenges extend beyond the airlines as it involves all players in the aviation ecosystem, but it provides an opportune time for us to work closely with our partners to strengthen the competitiveness of the industry, and to emerge from this period better positioned for long-term growth. We continue to explore the possibilities of expanding our aircraft orderbook and additional leased aircraft, which will support our expansion plans and strengthen our ability to serve even more destinations.” For Editorial Inquiries Contact: Editor Matt Driskill at [email protected] For Advertising Inquiries Contact: Head of Sales Sally Passey at [email protected]