Why AirAsia's latest crisis matters to Malaysia

AirAsia is under pressure again.

But this time, people are still flying. The challenge is that fuel costs have surged, while many tickets were sold months earlier.

And this matters beyond just AirAsia.

When one airline carries around 60% of Malaysia’s domestic aviation market, what happens to it can affect connectivity, competition, tourism and potentially the fares Malaysians pay.

To be clear: this does not mean AirAsia is going to fail. Its Malaysian short-haul operation remained profitable in Q2.

But after surviving Covid, AirAsia is facing another very different test.