Group CEO Nasaruddin Bakar said the crisis had created an opportunity for Southeast Asian airports to attract transit passengers affected by operational disruptions at traditional transfer hubs in the Middle East.
“Given the opportunity we have today, we will ensure that we enhance connectivity from KLIA to the rest of the world,” he said during MAG’s 2025 review briefing here today.
He said the group would review and adjust routes and flight frequencies to capitalise on shifting travel patterns caused by airspace closures and disruptions in the Middle East.
The conflict has forced airlines to reroute flights, extend journey times and suspend certain services, while also affecting passenger flows that typically transit through Gulf hubs.
MAG said it had already seen stronger demand on some long-haul routes, particularly those linking eastbound and westbound travel, as passengers increasingly seek alternative transit options.
Last year, a leading global travel industry platform said KLIA was the most connected airport in Asia Pacific, and fourth globally.
OAG Megahubs also said KLIA held the world’s No 1 spot among low-cost carrier megahubs, with AirAsia contributing about 36% of its operations.
KLIA handled 63.3 million passengers last year, up 10.8% year-on-year.
No immediate fuel supply risk
Nasaruddin said MAG was managing rising operational pressures from the Middle East crisis and elevated jet fuel prices by adjusting fares, optimising capacity and strengthening its fuel procurement and hedging strategies while maintaining a positive demand outlook across key markets.
He said fuel accounted for about 40% of MAG’s operating costs, and that recent price spikes had increased overall expenses. In response, the group is reviewing flight capacity and implementing dynamic pricing based on market conditions to safeguard financial performance.
On fuel supply concerns in the region, Nasaruddin said MAG faces no immediate risks as it has contractual commitments with suppliers and continues to secure fuel from multiple stations to support uninterrupted operations.
He said about 36% of MAG’s fuel needs were hedged for the year, with roughly 50% hedged for the second quarter. Nasaruddin also said MAG’s hedging strategy was structured within a capped range of around US$80 per barrel, while allowing participation if prices fall, balancing both upside and downside risks.
Jet fuel prices have surged since the start of the Middle East war over a month ago, largely due to disruptions in the Strait of Hormuz – a key route for over 20% of global oil – and attacks on regional refineries.
Jet fuel prices, which were around US$85 to US$90 per barrel before the war, have soared to between US$150 and US$200 per barrel.
Despite the volatile environment, Nasaruddin said passenger demand remains strong, with load factors on certain routes reaching close to 90%. However, he warned that demand could soften if the crisis persists, which would require adjustments to pricing and capacity.
Nasaruddin said MAG also reported improvements in customer satisfaction, driven by new aircraft, enhanced in-flight dining, ongoing cabin crew training and broader service upgrades across passenger touchpoints.
Looking ahead, Nasaruddin said MAG remains cautiously optimistic, supported by strong demand from China and India, and would continue expanding where financially viable, although performance would remain sensitive to fuel price volatility.