He said the low-cost carrier will not cancel flights as demand remains strong and that while higher fuel costs will inevitably lead to fare adjustments, AirAsia aims to keep increases lower than those of its competitors.

“Fares will have to go up. There are no two ways about it, but our fares will increase much less than others,” Bernama reported him as saying today.

Fernandes said despite cost pressures, AirAsia remains able to operate and absorb part of the burden, partly due to reduced flight capacity from Gulf carriers.

“We can absorb these additional costs as flight capacity from the Gulf region, such as Emirates, Etihad Airways and Qatar Airways, has decreased by around 15-20% of seats,” he said, adding the reduction in capacity offers Asean countries the chance to establish themselves as alternative aviation hubs in the region.

Fernandes said rising costs, however, should not be borne by airlines alone but must be addressed via collective efforts across the industry.

“We are doing our best to keep fares as low as possible, but we will require support from other parts of the aviation ecosystem.

“Fuel companies must also play their part. Airports have to play a part. Other supply chains have to play a part.

“It is a wonderful opportunity to build a hub and do all these extra things. The great thing about this is that all airlines will work together, which is fantastic.”