AirAsia’s Tony Fernandes warns costs will ‘go up dramatically’ over the next 12 months: ‘Can’t get a vaccination for Donald Trump’
Source: Fortune ·
Fernandes says the squeeze will last about a year—and that the next leg of growth is in secondary cities like China's Shantou.
From the source
Airline fuel costs are about to jump as carriers’ hedges expire, AirAsia co-founder Tony Fernandes warned. “It’s tough,” Fernandes, who is also chief executive of Capital A Group, said onstage at the Global Tourism Economy Forum (GTEF) in Macau on Oct. 16, during a panel moderated by Fortune‘s Asia editorial director Lee Williamson. “Any airline who says it’s great is not telling the truth. A lot of people’s hedges are coming off, and prices are going to go up dramatically.” Asia’s carriers are still grappling with high fuel costs in the wake of the U.S. war with Iran. Disruption to oil supplies through the Strait of Hormuz is keeping jet fuel and diesel prices elevated. Asian jet fuel is trading at just over double the average last year, according to calculations by the International Air Transport Association. Low-cost carriers have less room to increase fares, so rising fuel prices hit their margins. AirAsia, in particular, has struggled with higher jet fuel prices and a large debt…