High Airfares Here to Stay, But Demand Remains Strong

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High Airfares Here to Stay, But Demand Remains Strong

High Airfares Here to Stay, But Demand Remains Strong

AirAsia CEO Bo Lingam predicts that high airfares will persist despite the post-pandemic travel boom. He attributes this to strong demand and supply chain constraints.

While travelers may see some relief next year due to declining jet fuel prices and increased flight capacity, Lingam believes airfares are unlikely to return to pre-pandemic levels anytime soon.

The global aviation industry has been grappling with a surge in travel demand since the pandemic's easing. This has led to ticket prices outpacing inflation in many regions. Additionally, supply chain issues, including aircraft delivery delays and unplanned engine maintenance, have hampered airlines' ability to meet the demand.

AirAsia, Asia's largest low-cost carrier, has seen its load factor reach an unprecedented 90%. To cater to the growing demand, the airline plans to convert its entire order book of 377 planes to Airbus SE's new long-range A321 models. These models offer greater fuel efficiency and can fly further at a lower cost.

AirAsia's ambition is to establish the world's first low-cost carrier network by 2030, leveraging its Southeast Asian bases as a hub. This year, the airline has added flights to Almaty in Kazakhstan and launched operations in Cambodia. It also plans to commence flights to Nairobi, Kenya, in October.

With the merger of AirAsia's short and long-haul operations in September, Lingam will head a new listed entity called AirAsia Group. He intends to transfer his expertise to his two deputy CEOs, Chester Voo and Farouk Kamal, over the next five years. He assures that there will be no changes in AirAsia's operations when founder Tony Fernandes transitions to an advisory role and focuses on non-aviation businesses under Capital A Bhd.

Despite the challenges, Lingam remains optimistic about the future of AirAsia. He believes the airline is well-positioned to capitalize on the growing demand for air travel in the region.