Malaysia
AirAsia Group Reports RM527 Million Loss Amid Rising Fuel Costs
The airline plans to cut seat capacity by up to 25% as it grapples with soaring fuel prices and currency depreciation.
KUALA LUMPUR — AirAsia Group Bhd has announced a net loss of RM527.16 million (approximately USD 115.5 million) for the second quarter of 2026, a significant increase from a loss of RM154.9 million in the previous quarter. This downturn is largely attributed to soaring fuel expenses and adverse foreign exchange impacts, the company stated in a filing with Bursa Malaysia.
The airline's revenue for the quarter stood at RM5.09 billion (around USD 1.1 billion), yet it faced escalating fuel costs, which surged by 66% compared to the previous quarter, driven by geopolitical tensions in West Asia. Aircraft fuel expenses alone amounted to RM2.80 billion (approximately USD 617 million), with additional costs for maintenance and user charges reaching RM537.34 million (USD 119 million) and RM506.51 million (USD 113 million), respectively.
“The loss was mainly attributable to higher fuel expenses after average fuel prices rose 66% from the preceding quarter.”AirAsia Group, financial filing
In addition to fuel costs, AirAsia reported a net foreign exchange loss of RM330.97 million (about USD 73 million) due to the depreciation of several regional currencies, including the Malaysian ringgit, Thai baht, Indonesian rupiah, and Philippine peso against the US dollar.
For the first half of 2026, AirAsia Group's net loss reached RM682.04 million (USD 151 million) on revenues of RM11.03 billion (USD 2.4 billion). The company did not provide year-on-year comparative figures, citing the reverse acquisition of AirAsia by AirAsia Aviation Group Ltd (AAAGL) as the reason for the lack of historical data.
Looking ahead, AirAsia Group plans to reduce its seat capacity by 20-25% year-on-year in the third quarter of 2026, a period traditionally marked by lower travel demand. The airline is also set to accelerate fleet optimization by returning 25 older, less fuel-efficient aircraft to lessors within the financial year. This decision comes as the company adjusts to ongoing geopolitical uncertainties and volatile energy prices, with jet fuel prices recently exceeding USD 140 per barrel.
“The airline plans to cut seat capacity by 20-25% year-on-year in the third quarter of 2026.”Bo Lingam, CEO of AirAsia Group
AirAsia Group's Chief Executive Officer, Bo Lingam, noted that the financial pressures are particularly acute in its short-haul operations across Thailand, the Philippines, and Indonesia, while its core short-haul operations in Malaysia and Cambodia remain profitable. The airline has suspended underperforming long-haul routes and postponed plans for a proposed hub in Bahrain, focusing instead on domestic and high-yield ASEAN routes.
As the airline industry continues to grapple with rising operational costs, AirAsia Group has opted not to declare any dividends for the quarter ended June 30, 2026, reflecting its ongoing financial challenges.