AirAsia’s Tony Fernandes says travel demand remains strong, current crisis ‘far’ less severe than Covid-19

On September 18, AirAsia co-founder Tony Fernandes expressed confidence in the airline's financial situation, stating that the current crisis faced by the low-cost carrier was "far, far" less severe than the challenges it encountered during the Covid-19 pandemic. Addressing investors at a media briefing, Fernandes highlighted the strong liquidity of AirAsia and its ability to manage cash effectively.

Fernandes attributed the current crisis to geopolitical tensions and higher fuel prices, emphasizing that travel demand remained strong. The briefing occurred two days after Reuters reported, based on unnamed sources, that Malaysia's government had inquired whether Malaysia Airlines and Batik Air could take on AirAsia's domestic market share as part of scenario planning while monitoring the airline's financial health.

As of June 30, AirAsia's current liabilities amounted to RM18.4 billion (S$5.73 billion), with cash and bank balances totaling RM954 million. Fernandes acknowledged that the second quarter of the year presented the toughest period for the airline, which controls approximately 60% of Malaysia's domestic market. He predicted improving conditions as AirAsia adjusts fares to accommodate higher fuel costs.

The surge in jet fuel costs, driven by the US-Israeli war on Iran, increased by 66% in the second quarter, reaching an average of $183 per barrel. AirAsia's shares plummeted by 21% on September 17 following the Reuters report. Malaysian financial markets were closed on September 16 for a public holiday, and as of September 18, AirAsia shares were trading 2% lower, down as much as 5% earlier. The stock has shed more than 70% of its value so far in 2026.

Fernandes emphasized that no single entity could replace AirAsia's fleet of 100 planes in Malaysia overnight. The group's load factor, representing seat fill rates, stood at 80% in the third quarter, and he reported strong bookings for the fourth quarter, expressing optimism about operations in Indonesia, the Philippines, and Thailand. In the second quarter ended June 30, AirAsia reported a net loss of RM831 million, primarily due to rising jet fuel costs and significant foreign-exchange losses of RM331 million.