AirAsia X, Southeast Asia's largest low-cost carrier, announced on Monday that it will raise ticket prices and cut routes in response to the ongoing war on Iran, which has significantly impacted the airline's operations and costs [1]. The Malaysia-based airline has already reduced about 10 percent of its overall flights, although its planned services to Bahrain, the company's first Middle East hub, are still scheduled to launch in June [1]. Founder Tony Fernandes stated that higher prices are 'unavoidable' and that capacity would be cut on routes where fuel costs cannot be covered [1].
The conflict, triggered by U.S.-Israeli strikes on Iran in late February, led Tehran to effectively close the Strait of Hormuz, a key global oil supply route, causing many international airlines to increase fuel surcharges [1]. AirAsia X's chief commercial officer Amanda Woo explained that the airline is able to spread operations along routes where high fuel surcharges can be recovered, and is also implementing measures to mitigate price hikes, such as reducing baggage fees [1].
Despite these challenges, demand for flights remains high, and AirAsia X officials described the profitability outlook for the rest of 2026 as 'manageable,' though it depends on the duration of the crisis [1]. The airline posted a 1.96 billion ringgit ($486 million) profit last year, marking a recovery from the COVID-19 pandemic [1]. Independent non-executive chairman Jamaludin Ibrahim noted that AirAsia X turned a 'very difficult chapter into a profitable year in 2025,' but acknowledged that the current crisis directly impacts costs, margins, and network decisions [1].
CONCLUSION
AirAsia X is responding to the Middle East conflict by raising fares and cutting capacity, with about 10 percent of flights already reduced. While demand remains strong and profitability is described as manageable, the airline's outlook is closely tied to the duration of the crisis. The company continues to adapt its network and pricing strategies to cushion the impact on costs and margins.