AirAsia CEO Tony Fernandes says fares will rise due to fuel costs but remain lower than competitors, with no flight cancellations as demand stays strong.
KUALA LUMPUR: AirAsia expects to implement modest fare increases while maintaining its low-cost positioning, according to its parent company’s chief executive.
Capital A CEO Tan Sri Tony Fernandes (pic) said higher fuel costs following conflict in West Asia will inevitably lead to fare adjustments.
“Fares will have to go up; there is no two ways about it, but our fares will increase much less than others,” said Fernandes.
He confirmed the low-cost carrier will not cancel flights as demand remains strong.
Fernandes said the airline is doing its best to keep fares as low as possible but requires support from other parts of the aviation ecosystem.
He stated that AirAsia can absorb part of the cost burden, supported by reduced flight capacity from Gulf carriers.
“Demand is good, we can continue operating and absorb these additional costs as flight capacity from the Gulf region, such as Emirates, Etihad, and Qatar, has decreased by around 15 to 20% of seats,” said Fernandes.
He noted this reduction offers ASEAN countries a chance to establish themselves as alternative aviation hubs.
However, Fernandes emphasised that rising costs should not be borne by airlines alone.
“The burden cannot be shared by the aviation industry alone. Fuel companies must also play their part. Airports have to play a part. Other supply chains have to play a part,” he said.
He expressed confidence the company can navigate the current situation, having weathered greater challenges during the COVID-19 pandemic.