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AirAsia<\/a> declared on Monday that it would be eliminating routes and increasing ticket prices<\/a> by as much as 40%, in an effort to mitigate the effects of the war.<\/p>\n \nThe Malaysia-based low-cost airline reported that 10% of its total flights had already been cancelled. Fare rates have gone up between 31 and 40%, while fuel surcharges have risen up by approximately 20%. He continued by saying that although the group does not “have all the answers” to the geopolitical scenario, management is using prior knowledge and is ready to react, including decreasing capacity or expenses if necessary.<\/p>\n Low-cost airlines are being particularly affected by the fuel price increase, which is putting pressure on their low-cost business models and revealing AirAsia X’s fragile financial situation. Group Chief Executive Officer Bo Lingam stated that the airline’s biggest problem is the average cost of jet fuel,<\/a> which has increased from around $90 per barrel to about $200.<\/p>\n Malaysian low-cost carrier AirAsia X has hiked airfares by as much as 40% and raised fuel surcharges by a fifth after jet fuel costs more than doubled in the wake of the Iran war https:\/\/t.co\/xaQCCCjnA0<\/a><\/p>\n
In a media event on Monday, co-founder and strategic adviser Tony Fernandes stated that rising costs were \u2018unavoidable\u2019 and that capacity will be reduced on routes “where we don’t believe we can cover the cost of the fuel.”<\/p>\n\n