Hedges expiring, prices rising

AirAsia co-founder Tony Fernandes warned at the Global Tourism Economy Forum in Macau on October sixteenth that airline fuel costs will jump dramatically as carriers' hedges expire. Anyone claiming otherwise is not telling the truth.

“A lot of people's hedges are coming off, and prices are going to go up dramatically.”

Iran conflict keeps fuel elevated

Disruption to oil supplies through the Strait of Hormuz is keeping jet fuel and diesel prices elevated.

Low-cost carriers hit hardest

Low-cost carriers have less room to increase fares, so rising fuel prices hit their margins harder.AirAsia has struggled with higher jet fuel prices and a large debt burden.

Fernandes seeks debt refinancing

AirAsia plans to raise one billion dollars for debt refinancing.Fernandes recently met with Malaysian government officials to discuss funding support.

Volatility expected to last months

Fernandes estimated the current period of volatility would last about twelve months, though conceded the timing was a guess.

“You can't get a vaccination for Donald Trump. We just have to live with it for the moment.”

New aircraft unlock secondary cities

Fernandes expects Asia's travel boom will focus on secondary and tertiary cities.AirAsia is tapping the Airbus A321LR on its Seoul route, tripling frequency.The newer A321XLR can fly for up to nine hours.

“160 seats opens you up to a huge market.”