Fernandes: Cheaper jet fuel prices allow for lower air fares

1 December, 2014
As appeared in The Star

KUALA LUMPUR: Jet fuel prices which currently stand at US$85 a barrel, will not only reduce the operating cost of airline companies, but also help them lower air fares to create more demand.

AirAsia Group chief executive officer Tan Sri Tony Fernandes said he believed the group’s operating cost will decline quite dramatically, and was very optimistic of a strong profit performance by AirAsia X next year.
“Our cost will go down, some will be passed on to consumers. So, it is really a good time to be in the airline industry and accelerate income growth,” he added.

He told reporters this on the sidelines of the launch of the “Lifting The Barriers (LTB) Report “, organised by the Asean Business Club (ABC) on Monday.

The LTB Report is a year-long joint effort by the CIMB Asean Research Institute and the ABC to identify bottlenecks and barriers hindering free trade of prioritised sectors in the context of the Asean Economic Community (AEC).

Earlier, Fernandes said he expected the country’s aviation industry to be positive next year, as the biggest thing apart from oil prices is the restructuring of Malaysia Airlines.

Also, Chairman of the Asean Business Club Forum 2014, he is optimistic that Khazanah Nasional Bhd is very focused on the airline being run profitably.

“If Malaysia Airlines is managed the right way, then I foresee a very healthy aviation sector,” he said.

Fernandes said Malaysia Airlines, AirAsia and AirAsia X are great for the economy, particularly Malaysia Airport Holdings Bhd, the maintenance, repair and overhaul business and tourism sector.

“Next year is a fantastic opportunity for Malaysia to capitalise on making Kuala Lumpur, the centre of Asia and of low cost travel,” he added. – Bernama