AirAsia X Cuts Fares as Fuel Prices Ease, Eyes Capacity Recovery by August
AirAsia X has cut fares by around 5% as fuel prices ease, with the airline expecting to restore full operating capacity by August while continuing to review ticket prices on a weekly basis.
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Malaysian budget carrier AirAsia X has begun to cut ticket prices as lower fuel prices offer some respite for airlines reeling from months of volatility driven by geopolitical tensions and surging operating costs.
The airline has cut fares by about 5 per cent since 15 June and will continue to monitor prices weekly as fuel costs change, AirAsia X CEO Benyamin Ismail (Bo Lingam) told Reuters.
“Week by week, as fuel prices go down, we will also be revising our fares,” Lingam said, signalling the carrier’s intention to pass on some of the savings to consumers.
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Cost-Cutting Measures:
The fare cut is a response to a tough time for the airline, which was forced to make a number of operational adjustments as global travel patterns were impacted by the U.S.-Iran conflict and jet fuel prices jumped. To manage costs, AirAsia X has eliminated underperforming routes, redistributed demand across its network and started renegotiating contracts with vendors and aircraft lessors.
“We went back to see how we can restructure and renegotiate all our contracts, which is still ongoing,” said Lingam.
High fuel prices hit the carrier hard in the first quarter, and it reported a loss after cutting about 10% of its flights and imposing fuel surcharges to help offset higher operating costs.
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Recovery Mode:
Since then fuel markets have stabilised. Singapore jet fuel prices jumped to around $242 a barrel in late March on rising geopolitical tensions and have fallen substantially since to trade around $112 a barrel last week. The fall, while still well above pre-conflict levels of around $80 a barrel, has given airlines more scope to manoeuvre pricing strategies.
With fuel costs easing and demand conditions improving, AirAsia X expects to gradually restore operations, with full capacity likely to return by August.
The airline is also looking beyond short-term recovery and preparing for future expansion. Lingam said AirAsia X expects to receive its first Airbus A220 aircraft by the end of 2027, with the initial deployment planned in the Philippines.
The developments highlight how airlines are recalibrating fares, operations and fleet plans in response to shifting fuel prices and geopolitical uncertainty, while positioning themselves for long-term growth as market conditions stabilise.
