Kuala lumpur: Malaysia Aviation Group (MAG) is experiencing considerable financial pressure for its financial year 2026 (FY2026) due to ongoing increases in fuel prices. MAG's president and group chief executive officer, Captain Nasaruddin A Bakar, highlighted that the escalation of conflict in West Asia has significantly driven up fuel prices, subsequently impacting the group's financial standing. "Yesterday, it was at US$160 per barrel (for jet fuel). It has (put) significant pressure on our financial funds, and that will have an impact on the group," he shared during a press conference today.
According to BERNAMA News Agency, despite operational successes in the first two months of the year and recording profits during that period, MAG is now feeling the repercussions of the West Asia crisis. The group is actively monitoring market conditions, making targeted adjustments to its network to manage costs, and safeguarding financial performance. "We are very cautious. We are doing a surgical cut on our destinations. Today, we have been cutting about five per cent of our available seat kilometres (ASKs), approximately about 8,000 of our total flights," Captain Nasaruddin added.
MAG remains vigilant in assessing demand and market conditions daily to maintain its financial performance by focusing on the right markets and routes. Captain Nasaruddin acknowledged the supportive role of the government towards the aviation industry and expressed optimism about the upcoming tabling of Budget 2027. The group engages regularly with the government to explore measures that could alleviate cost pressures, including airport-related fees. He mentioned the recent peak in fuel prices, reaching US$230 per barrel, as a significant challenge for MAG and the global industry.
As a national carrier, Captain Nasaruddin emphasized the importance of continuing operations in profitable markets to support the country's growth. He also disclosed that MAG has hedged fuel at approximately 36 to 50 percent. "We hedge our fuel every quarter. And moving forward to 2027, it really depends on the fuel out there in the market. We will continue hedging, and our current strategy is every 12 months running. Moreover, with the hedging that we have got as a group, it has helped us a lot in terms of our past performance," he concluded.