Jet fuel surge adds RM7.5bil to MAG costs, Malaysia Airlines fares rise 30pct
Rafhanah Hazirah Ramlin
Malaysia Aviation Group (MAG) faces a potential RM7.5 billion increase in expenses due to a spike in jet fuel prices, following the conflict in the Middle East since late February. MAG's CEO, Captain Nasaruddin A Bakar, stated that each US$1 rise in oil prices impacts the group's finances by roughly RM50 million. Jet fuel costs, which were under US$100 per barrel in January 2026, jumped to around US$227 after the conflict began on February 28.
MAG was profitable during the first two months of 2026, but the surge in fuel prices significantly strained operating costs. MAG's financial performance for the year is projected to be negatively affected despite a 19% revenue rise compared to the previous year. To manage escalating costs, Malaysia Airlines has cut flights on unprofitable routes, accounting for about 5% of total flights or approximately 8,000 flights this year.
The airline is also implementing fuel surcharges, hedging strategies, and reducing non-essential spending to alleviate the impact of oil price volatility. However, these measures have not yet fully offset the increase in fuel costs. Malaysia Airlines ticket prices have also risen by about 30%, as the cost pressures contribute to overall fare increases.
The airline expects fare stabilization if oil prices decline after the conflict ends, although the timing of recovery remains uncertain.
Written by urgent.news from New Straits Times's reporting — not their text. Machine-written — may contain errors; check the original before relying on it.
