MAG Sees Significant Pressure For FY2026 Amid Higher Fuel Costs

KUALA LUMPUR, Sept 4 (Bernama) -- Malaysia Aviation Group (MAG) sees significant pressure for its financial year 2026 (FY2026) amid sustained increases in fuel prices. 

MAG president and group chief executive officer Captain Nasaruddin A Bakar said fuel prices had risen significantly following the escalation of the conflict in West Asia, placing additional pressure on the group’s financial position. “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 told a press conference today.

He said the group had performed well operationally during the first two months of the year and recorded profits during the period before the impact of the West Asia crisis was felt. The group is also closely monitoring market conditions and making targeted adjustments to its network to manage costs and safeguard its 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,” he added.

Captain Nasaruddin said MAG would continue to monitor demand and market conditions daily to determine the appropriate markets and routes to maintain the group’s financial performance.

On the government’s support for the aviation industry, especially expectations for the upcoming tabling of Budget 2027, he noted that the government had been supportive of MAG and other airlines in the country amid a challenging operating environment.

He said MAG has also been engaging regularly with the government to discuss measures that could help ease cost pressures, including certain airport-related fees. “We know there are a lot of obstacles out there with regard to the fuel price in particular, especially at this point in time. It reached a peak of US$230 per barrel recently, and that's a huge impact, not only to us, but to the global industry as well,” he pointed out. 

As a national carrier, he noted that it is important for MAG to continue flying and to ensure that the airline flies to the right markets that are profitable to support the growth of the country.

He also revealed that the group has hedged fuel at approximately about 36 to 50 per cent. 

“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 added.

-- BERNAMA