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AirAsia Group Bhd's operation remains financially sustainable, with over RM1 billion in cash reserves, according to group adviser Tan Sri Tony Fernandes. Addressing recent concerns about the airline's finances, Fernandes stated that the airline has not requested government assistance and is managing costs effectively, even as jet fuel prices have surged and impacted earnings.
The airline's shares declined over 70% since the start of the year, currently trading at approximately 48.5 sen, with a market capitalization below RM1.6 billion. Fernandes highlighted that jet fuel prices, hovering between US$170 and US$190 per barrel, are significantly higher than pre-war levels but do not threaten the airline's operations, as no aircraft have been grounded to date.
Operational Outlook and Financial Performance
Despite financial pressure, AirAsia has continued to operate its fleet of 250 aircraft, including 10 scheduled to resume flying by October. The airline has recently phased out 25 older aircraft and expects a capacity rebound by December after trimming some less viable routes. However, the company's net loss for the quarter ending June 30, 2026, widened to RM527.16 million, leading to capacity reductions and suspension of certain routes, including its Bahrain hub plans.
"We are okay, we are sustainable," Fernandes affirmed, emphasizing strong liquidity and cash management. The Malaysian government has inquired whether Malaysia Airlines and Batik Air could absorb some of AirAsia's domestic market share, adding to market pressures.
Fernandes also remains hopeful that regional conflicts, such as the Iran war, will resolve swiftly, enabling airline capacity to recover. The airline's recent performance reflects ongoing challenges but also resilience amid adverse market conditions.
