MAG Faces RM7.5 Billion Cost Surge Amid Fuel Shock

KUALA LUMPUR, Sept 14 — Malaysia Aviation Group (MAG) is bracing for up to RM7.5 billion in additional costs following a sharp rise in jet fuel prices triggered by the Middle East conflict in late February.

Group president and CEO Captain Nasaruddin A Bakar said every US$1 increase in oil prices impacts MAG’s financial performance by about RM50 million. Jet fuel prices surged from below US$100 a barrel earlier this year to about US$227 after the conflict began, eroding profits despite revenue growth of 19% year-on-year.

MAG

To contain costs, Malaysia Airlines has cut about 5% of flights — around 8,000 services — and imposed fuel surcharges. Ticket prices have risen about 30% for domestic and international routes, with stronger demand markets such as London, Australia, New Zealand and India seeing higher fares.

Nasaruddin said MAG remains committed to supporting travel between Peninsular Malaysia, Sabah and Sarawak by maintaining fare limits. He added that fares could stabilise if oil prices ease once the conflict ends, though timing remains uncertain.

The fuel shock mirrors global airline pressures, with carriers including Singapore Airlines, Cathay Pacific, Thai Airways and AirAsia X all raising fares or cutting capacity.

#businessnews