KUALA LUMPUR: AirAsia X, Malaysia’s long-haul low-cost carrier, announced on April 6 (Monday) that its ticket prices will go up by as much as 40% due to the price surge in jet fuel.
Before the United States and Israel began bombing Iran on Feb 28, jet fuel cost around US$90 (S$115) per barrel. However, the effective closure of the Strait of Hormuz has resulted in a global energy crisis that has particularly affected Asia. Jet fuel reached US$195 by the end of March and has lately even breached the US$200 mark in some markets as tensions in the Middle East increased.
Calling the doubling of jet fuel prices the carrier’s biggest challenge to date, AirAsia X’s Chief Executive Officer Bo Lingam said at a press briefing on Monday that it is also cutting 10% of total flights, aside from prices rising between 31 and 40%.
Nevertheless, the company added that the demand for flights is still high.
At the briefing, Tony Fernandes, who founded AirAsia, called the uptick in ticket prices unavoidable and clarified that flights are being reduced to routes where the company does not believe it can cover the cost of the fuel.
AirAsia X, which operates distinctly from AirAsia, flies out of Kuala Lumpur to 150 destinations in Australia, Japan, South Korea, China, Saudi Arabia, and Turkey, as well as other countries, with flights lasting at least 5 or 6 hours.
Jet fuel shock has also affected airlines, especially low-cost carriers across Asia. In Thailand, Thai Lion Air, Nok Air, Thai AirAsia, and Thai AirAsia X announced suspending select services. Starting from April 1, Vietnam Airlines suspended seven domestic flight routes, while Vietjet Air and Bamboo Airways are also reducing the number of their flights. Cuts to Batik Air Malaysia are affecting flights to Kuala Lumpur, Penang, Langkawi, and Johor Bahru, and in the Philippines, the low-cost carrier Cebu Pacific announced temporary route suspensions and frequency reductions not only for domestic flights but also for those to Singapore, Jakarta, Kuala Lumpur, Melbourne, and Sydney.
Jet fuel scarcity coming soon to Europe
The challenges faced by Asian carriers are likely to spread to the rest of the globe, industry experts have warned. According to Faith Biro, the executive director of the International Energy Agency, the loss of oil this month will be two times of that in March, meaning that diesel and jet fuel will grow even scarcer.
Mr Biro said in an interview last month, “We are seeing that in Asia, but soon, I think, in April or May, it would come to Europe.”
“Travel has gotten a lot more expensive in Asia, with many airlines adding fuel surcharges or downright cancelling flights. Europe is facing imminent jet fuel supply shortages. Brace yourselves,” a senior oil market analyst at Sparta Commodities wrote in a post on X. /TISG
Read also: SIA, Scoot yet to impose fuel surcharges even as global airlines move to raise fares
