KUALA LUMPUR: Airfares on several routes from Malaysia have begun rising as airlines respond to higher jet fuel prices and operational adjustments linked to geopolitical tensions in the Middle East.
Jet fuel prices have climbed above US$100 per barrel from around US$85-US$90 previously, according to industry estimates, as tensions in the region disrupt supply chains and force airlines to adopt longer flights to avoid certain airspaces.
Malaysia's major airlines Malaysia Aviation Group (MAG), AirAsia X Bhd and Batik Air Malaysia Sdn Bhd (Batik Air) said fare adjustments and fuel surcharges are being reviewed or implemented to manage rising operating costs while maintaining network connectivity.
MAG - which operates Malaysia Airlines Bhd, Flyfirefly Sdn Bhd (Firefly) and AMAL by Malaysia Airlines - said ticket pricing is continuously assessed in response to market conditions.
"Airlines under MAG, namely Malaysia Airlines, Firefly and AMAL, continuously review airfares and fuel surcharges in response to prevailing market conditions.
"The group remains committed to balancing cost management while maintaining reliable and safe connectivity across its network," MAG told Business Times recently.
According to media reports, an internal memo from Malaysia Airlines dated March 9 indicated that the airline would increase fuel surcharge costs in two phases – on 11 March for all points of sale except Japan, South Korea, Taiwan, Hong Kong and the Philippines, and on March 25 for those markets.
The memo indicated that fuel surcharge for domestic flights is set at RM36 for Business Class seats and RM18 for Economy Class seats.
For flights from Malaysia to Asean destinations, the surcharge is RM60 for Business Class and RM45 for Economy Class.
Flights to the Middle East (excluding Qatar) and South Asia have fuel surcharges of RM75 and RM60 respectively.
Flights to North Asia (excluding Japan) and Greater China are subject to a surcharge of RM90 for Business Class and RM80 for Economy Class, while flights to Australia, New Zealand and Europe carry surcharges of RM130 and RM110 respectively.
Media reports also said that Batik Air has introduced higher fuel surcharges for both domestic and international flights.
Under the revised structure effective March 11, Batik Air's surcharge for domestic flights is RM50, while flights from Malaysia to Asean destinations carry a surcharge of RM80.
Flights from Malaysia to Australia have a surcharge of RM100, while flights to the Middle East, South Asia and Central Asia are set at RM80.
Flights to China and Taiwan carry a surcharge of RM90, while the same surcharge will also apply to flights to Hong Kong, South Korea and Taiwan from March 25.
Batik Air chief executive officer (CEO) Datuk Chandran Rama Muthy told Business Times that the airline has implemented targeted adjustments to fares and fuel surcharges on selected routes.
He added that the carrier's pricing structure is inherently dynamic and reflects fluctuations in supply, demand and operating costs.
"Batik Air's airfares are dynamic, reflecting market supply and demand, and they fluctuate according to the competitive environment. When costs rise, fares may adjust accordingly, and when costs ease, fares follow suit," Chandran said.
Low-cost carrier AirAsia X has also implemented adjustments to fares and fuel surcharges across its network, a measure the airline said is temporary.
The airline's deputy CEO Farouk Kamal said the measure was necessary to manage rising operating costs.
"AirAsia X continues to reaffirm its commitment to keeping fares affordable for travellers as a leading low-cost carrier and states that it will review the surcharges as market conditions evolve," he added.
Transport Minister Anthony Loke said on Facebook on March 12 that local airlines may suspend certain routes if fuel prices continue to rise significantly amid the ongoing Middle Eastern conflict.
Jet fuel typically accounts for up to 40 per cent of airline operating costs, making the sector particularly sensitive to oil price volatility.
Airlines across Asia are taking similar steps to offset rising fuel costs.
Hong-Kong based Cathay Group CEO Ronald Lam said jet fuel price in March have doubled compared with January and February, prompting the airline group to raise its fuel surcharge.
"In March, ever since the Middle East episode began, the costs of our fuel have already doubled, so we are going to announce very soon a corresponding increase in the fuel surcharge in order to ensure the smooth operation of our flights," he told reporters during a press conference last week after the announcement of Cathay Group's 2025 financial results.
Cathay Group's airline subsidiaries include Cathay Pacific and HK Express.
On March 12, Cathay Pacific announced an increase in its fuel surcharge effective March 18.
Under the revised structure, the fuel surcharge for short-haul flights will increase to RM174 (HK$290) from RM85 (HK$142)
For medium-haul flights, the surcharge will rise to RM325 (HK$541) from RM158 (HK$264).
For long-haul flights, the surcharge will increase to RM698 (HK$1164) from RM341 (HK$569).
The airline said in a statement that the fuel surcharge is reviewed regularly and closely tracks the price of refined jet fuel.
Kazakhstan's national carrier Air Astana said it is also closely monitoring fuel price developments, although the airline currently has certain structural advantages in fuel procurement.
Air Astana chief financial officer Ibrahim Canliel said the airline sources a significant portion of its fuel domestically, giving it some insulation compared to other international carriers.
Canliel will assume the role of Air Astana's CEO from April 1, 2026.
"The point I want to make about the prices and the spike in the fuel price is that we are coming from a different and more advantageous position compared to our peers, with 70 per cent of our fuel uplift being from Kazakhstan."
"We have had a price advantage because we are avoiding a number of middle agents in between that other airlines would be subject to," he said at a media briefing last week.
Canliel said the airline has benefited from this procurement structure since 2009, although international fuel prices remain a factor.
"For the international element, there is a significant increase in the price of jet fuel, and if the situation persists, we will have to reflect that to our airfares," he added.
India's largest airline IndiGo has also announced the introduction of a fuel charge across its domestic and international network.
The airline said the measure will take effect from March 14, 2026, citing a sharp rise in aviation fuel prices amid the Middle East conflict.
According to the airline, the International Air Transport Association's Jet Fuel Monitor shows that jet fuel prices in the region have increased by more than 85 per cent.
"Aviation Turbine Fuel represents a significant share of airlines' operating cost. This sudden and steep increase will have a material impact on all airlines' costs and network, including IndiGo's," the airline said in a statement.
While the full impact of the fuel price surge would require substantial fare adjustments, IndiGo said it had opted for a smaller fuel charge to limit the burden on passengers.
Under the new structure, the fuel charge per sector will be RM24 (₹425) for flights within domestic India and the Indian subcontinent.
Flights to the Middle East will carry a fuel charge of RM51 (₹900).
Flights to Southeast Asia and China, as well as Africa and West Asia, will carry a fuel charge of RM102 (₹1,800).
Flights to Europe will carry a fuel charge of RM130 (₹2,300).
IndiGo said it would continue to monitor the situation and make adjustments where necessary. - NST
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