AirAsia shelves long-haul expansion plans as fuel costs weigh on group

AirAsia Group is dropping its long-haul ambitions and refocusing on domestic and regional flying. Co-founder Tony Fernandes said at a press conference on 18 September that elevated fuel prices make the timing wrong.

The group has cut as much as a quarter of its capacity through September as part of a wider network reshaping, including dropping unprofitable routes. Fernandes called the period one of adjustment.

He rejected media accounts suggesting the airline was near collapse as irresponsible and absurd. Fernandes, who previously led the carrier and now works as an adviser, said the group is returning to its roots in Thailand, Malaysia, the ASEAN region, China and India, where it says demand remains solid and operations can be profitable.

He said the group is not abandoning its goal of becoming a global low-cost network carrier. That plan was promoted in 2025, with the aim of eventually serving Europe and North America from Southeast Asian bases using narrowbody aircraft alone. A proposed Middle East hub in Bahrain, meant as a springboard into Europe, has been dropped because of the continuing conflict in the region.

Instead of launching operations in Turkey or Bahrain on its own, Fernandes said AirAsia will partner with other carriers. That approach showed in a September codeshare deal with Turkish low-cost operator Pegasus Airlines, which draws on AirAsia's Kuala Lumpur-Istanbul service to extend its reach into Europe.