Why Did AirAsia Share Price Drop? A 21% Plunge, Fuel and Funding

AirAsia Group Bhd (AAGB, 5238) fell 21% to 50.5 sen on 17 September, its biggest one-day drop since March and its lowest close since 2022. The trigger was a Reuters report that the government had asked Malaysia Airlines and Batik Air whether they could absorb its domestic routes. Tony Fernandes denied it the next day and the shares bounced 5% to 53 sen. Here is why the AirAsia share price dropped, and what the airline did the last time oil tried to kill it.

Updated 18 September 2026, after the close, with both sessions, the Reuters report and the denial. First published on the morning of 17 September, before the fall.

Why did AirAsia share price drop?

Four things: a report that the government is planning for an AirAsia it cannot rely on, jet fuel at US$183 with no hedge, a US$1 billion refinancing the market doubts, and a Finance Ministry adviser on the books.

• The government sounded out its rivals. Reuters, 16 September: Putrajaya asked Malaysia Airlines and Batik Air whether they could absorb AirAsia’s domestic market share. Both said they would need its aircraft leases too. The shares fell 21% the next day on 156 million shares.
• Fernandes calls it ludicrous. On 18 September he said there were no talks with the government, AirAsia needs no bailout and liquidity is over RM1 billion. The shares touched 47 sen, then closed up 5% at 53 sen.
• 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. Bloomberg says it also wants to amend a US$200 million private credit loan. The Finance Ministry hired its own adviser on 3 September.

Is AirAsia in financial trouble?

It is losing money and short of cash, and it says it is fine. Two straight quarterly losses, RM954 million of cash against RM18.4 billion of current liabilities at 30 June, and a US$1 billion refinancing still to close. Fernandes says liquidity is now over RM1 billion and no rescue is needed.

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. In May Fernandes said hedging “never really works”.
• 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.

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, and this time the state is reported to be planning for failure as well as rescue.

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

What to watch for AAGB shares

• Any dayAn on-record word from the Finance or Transport Ministry. So far the denial is Fernandes’ account, not a ministry statement.
• 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.

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

Sources

• Reuters via Malay Mail: government asks Malaysia Airlines, Batik Air if they can absorb AirAsia routes (16 Sep)
• The Edge: AirAsia falls to near four-year low amid concerns over financial health (17 Sep)
• Bloomberg via The Star: AirAsia falls 21% as rivals weigh market share (18 Sep)
• Bloomberg via The Star: AirAsia founder hits back at critics as stock slumps (18 Sep)
• Reuters via The Star: Fernandes says demand strong, crisis far less severe than Covid (18 Sep)
• Bernama via The Star: no government bailout discussions for AirAsia (18 Sep)
• 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 FMT: AirAsia stays defiant on fuel hedging (7 May)
• 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)
• 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, 5099.KL and Brent (BZ=F) daily data to 18 September 2026