AirAsia's Fernandes says travel demand remains strong, current crisis ‘far’ less severe than Covid

AirAsia co-founder Tony Fernandes stated on September 18 that the financial difficulties faced by the low-cost carrier due to rising jet fuel costs are significantly less severe than during the Covid-19 pandemic. Speaking at a media briefing, Fernandes emphasized that strong demand for air travel continues to support the business.

This statement came two days after Reuters reported, based on sources, that Malaysia's government had been discussing with Malaysia Airlines and Batik Air the potential absorption of AirAsia's domestic market share. The sources described this as part of scenario planning while authorities monitor the financial health of the country's largest low-cost carrier.

Fernandes revealed that the second quarter was the most challenging period for the airline, and he predicted improving conditions as AirAsia adjusts fares to account for higher fuel costs. The airline has been affected by soaring jet fuel costs caused by the US-Israeli conflict with Iran, which increased by 66% in the second quarter to an average of $183 per barrel.