AirAsia says soaring airfares are inevitable amid the Middle East conflict and oil crisis, but it remains confident about travel demand across its network and vows to maintain affordable airfares as much as possible.
Tony Fernandes, chief executive of Capital A and founder of low-cost carrier AirAsia, said that over the past two decades AirAsia has gone through many ups and downs, with Covid-19 so far being the worst, as planes had to be grounded.
Regarding the Middle East conflict, which has triggered a global oil crisis, AirAsia can still operate flights to meet strong travel demand.
He said travel demand has even improved, as many passengers are staying within the region and refraining from flying to Europe or the US.
The declining global seat capacity, mostly attributable to operational disruptions among Gulf carriers that account for 15-20% of total airline capacity, has also driven higher demand.
For the overall aviation sector, airfares would inevitably surge amid the conflict, but AirAsia will try its best to maintain affordable fares for passengers, said Mr Fernandes.
He added that the company remains confident about emerging stronger from this crisis, as it is using this period to improve efficiency.
At present, oil prices will have little or no direct impact on other non-aero businesses under Capital A.
Yesterday, Capital A appointed Effendy Shahul Hamid its new deputy chief executive as it enters a new growth phase, following the sale of its aviation businesses to AirAsia X Berhad.
Capital A operates five business arms: Asia Digital Engineering (ADE) for maintenance, repair and overhaul; Teleport for logistics; AirAsia MOVE for its mobility and travel platform; AirAsia Next for brand and intellectual property; and Santan for F&B.
ADE is expanding four new maintenance lines in Kuala Lumpur and is planning new hangars in Thailand, Bahrain, and the Philippines by the second half of this year.
Teleport benefits from increased e-commerce demand and from a reduction in global belly cargo capacity among Middle Eastern carriers.
It also plans to expand its F&B businesses through grab-and-go concepts and small restaurant formats, aiming to become Asean's McDonald's.
It plans to list AirAsia Next in the US by the end of this year, as well as pursue a dual listing of Capital A in Hong Kong by July or August, aiming to tap into the North Asia market.
