Why Is AirAsia Share Price Falling? Fuel, Funding and the 2008 Playbook

AirAsia Group Bhd (AAGB, 5238) closed at 59.5 sen on 17 September, its lowest since 2022. Jet fuel is near US$180 with no hedge, the airline wants US$1 billion from lenders, and the Finance Ministry has hired an adviser. Oil has tried to kill AirAsia before. Here is why the shares are falling, and what it did last time.

Why is the AirAsia share price falling?

Three things: jet fuel at US$183 with no hedge, a US$1 billion refinancing the market doubts, and a government adviser now on the books.

• No hedge, US$183 fuel. Fuel is about 60% of costs and the Q2 price was up 93% on a year ago. Net loss RM831 million, after RM155 million in Q1.
• A US$1 billion refinancing on a thin cushion. Cash RM954 million against RM3.13 billion of borrowings and RM13.3 billion of leases. The company says the raise replaces Covid-era debt, not a hole. The market is not sure.
• The government is looking at the books. Reuters reported on 3 September that the Finance Ministry hired Alton Aviation to assess AirAsia’s funding needs. No bailout is planned, a source said. The shares fell 5% the next session.

AirAsia fuel costs with no hedge

• Brent is back above US$100. IATA’s latest weekly jet fuel reading is US$181. Only Thai AirAsia has cover, 13% of Q3 at US$89.
• The fix is fares up, seats out. Fares rose 20% in May and June, the surcharge went up about 20%, Q3 capacity is cut up to 25% and 25 older jets go back. About 70% of the fuel hit was recovered. Fernandes still will not hedge.

How AirAsia survived expensive oil before

• 2008: the hedge was the mistake. Oil hit US$147, AirAsia had hedged everything, then crude collapsed. It unwound every hedge in Q3 2008 at RM641 million, dropped the surcharge and bought fuel spot. First loss ever, RM472 million. Profit of RM506 million in 2009.
• 2011 to 2014: three years above US$100, profitable every year. The surcharge came back, hedging shrank to three to six months out, and ancillary income covered a fifth of revenue. Profit fell to RM83 million in 2014 but never went negative.
• 2021: shareholders and creditors paid. A RM336 million placement and a RM974.5 million rights issue. AirAsia X paid creditors 0.5 sen in the ringgit on RM33.65 billion. A RM500 million government-guaranteed loan was approved and never drawn.

What is different for AirAsia in 2026

In 2008 the hedge was wrong and the balance sheet absorbed it. In 2021 equity and a debt write-off did the work. In 2026 there is no hedge, RM13.3 billion of leases, and the plan is more debt. The moves are the same as before. The cushion is not.

AirAsia has beaten that verdict three times. The fourth round is open.

What to watch for AAGB shares

• Q4 2026The US$1 billion deal: size, tenor and coupon. A smaller or costlier deal tells you what lenders think of the leases.
• Late NovemberQ3 results. Management called Q2 the floor. The test is whether the fuel bill fell faster than revenue.
• Any dayBrent and Singapore jet fuel. Analysts’ recovery cases assume about US$85 jet fuel. It is US$181.

Related: the RM831 million second quarter, this week’s 35 sen petrol jump, and the live AirAsia Group stock page.

Sources

• The Edge: AirAsia says US$1bil fundraising mainly for refinancing (2 Sep)
• AirAsia Group: capital raising and fleet optimisation statement (2 Sep)
• AirAsia Group: second quarter 2026 results (13 Aug)
• Bernama: AirAsia X posts net loss of RM154.88 million in first quarter
• Reuters via The Star: finance ministry hires adviser to assess AirAsia’s funding needs (3 Sep)
• Bloomberg via BusinessToday: no jet-fuel hedge makes AirAsia worst-performing airline stock (10 Mar)
• Bloomberg via FMT: AirAsia stays defiant on fuel hedging (7 May)
• The Edge: worst likely over as jet fuel normalises, analysts (14 Aug)
• The Edge: AirAsia clears all fuel hedges (March 2009)
• AP: oil sets new trading record above $147 a barrel (11 Jul 2008)
• Bangkok Post: short-term hedging gives AirAsia flexibility with fuel
• Amadeus and IdeaWorks: airline ancillary revenue report (AirAsia 19.8% in 2011)
• AirAsia annual results 2008 to 2015, as tabulated on Wikipedia from the annual reports
• Malay Mail: AirAsia to complete RM974.5m rights issue (2021)
• The Edge: Capital A unable to get RM500m Danajamin loan
• Malay Mail: AirAsia X debt restructuring approved by creditors (12 Nov 2021)
• ch-aviation: Bursa lifts AirAsia X’s PN17 status (November 2023)
• The Edge: Capital A to exit PN17 on May 20 (2026)
• Berkshire Hathaway: 2007 letter to shareholders (Warren Buffett on airlines)
• IATA jet fuel price monitor
• Bursa announcements for AirAsia Group Berhad (5238)
• Yahoo Finance: 5238.KL and Brent (BZ=F) daily data to 17 September 2026