AirAsia X hikes ticket prices by 40%, cut capacity by 10% as Iran war hits fuel costs

AirAsia planes are parked on the tarmac at Kuala Lumpur International Airport in Sepang.

Photo: AFP Southeast Asia’s largest low-cost carrier AirAsia X said on Monday it was raising ticket prices by as much as 40 per cent and cutting routes to cushion the impact of the war on Iran, but stressed demand for flights remained high.

The Malaysia-based no-frills airline said about 10 per cent of its overall flights had been cut so far.

It has raised fuel surcharges by about 20 per cent, while fare prices have increased between 31 per cent and 40 per cent.

Average jet fuel costs have soared to about US$200 per barrel from around US$90 previously, Group Chief Executive Officer Bo Lingam said in a media briefing on Monday, describing it as the airline’s most critical challenge.

The spike in fuel costs is hitting low-cost airlines particularly hard, pressuring business models built on cheap fares, while exposing AirAsia X’s fragile finances.

It also faces the threat of jet fuel supply shortages across the region, from Vietnam to the Philippines, including its home market of Malaysia.

Tony Fernandes, the CEO of AirAsia’s parent company, Capital A, poses with a model of his company’s plane.

Photo: Reuters Founder Tony Fernandes said at the same briefing higher prices were “unavoidable” and that capacity would be cut on routes “where we don’t believe we can cover the cost of the fuel”.

Many international airlines have hiked fuel surcharges since the US-Israeli strikes on Iran triggered the conflict in late February, prompting Tehran to respond by effectively closing the Strait of Hormuz, a crucial artery for global oil supplies.

AirAsia X chief commercial officer Amanda Woo said the carrier, which flies to more than 150 destinations across 25 countries, was able to spread operations along routes “where we can recover the high fuel surcharges”.

The airline was also taking measures to try to rein in price hikes, including reducing baggage fees, Woo added.

Hit hard by the Covid-19 pandemic, AirAsia gradually recovered, last year posting a 1.96 billion ringgit (US$486 million) profit, according to its website.

An AirAsia plane prepares to land in Chiang Mai, Thailand, on March 31.

Photo: Reuters Asked how the Iran war would affect profitability for the rest of 2026, AirAsia X officials said the outlook remained “manageable” but would depend on the duration of the crisis.

AirAsia X turned a “very difficult chapter into a profitable year in 2025”, its independ

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