Airline association says fuel now accounts for one-third of operating costs, while slowing passenger growth makes it increasingly difficult to pass higher expenses on to travellers.
Kuala Lumpur – Malaysia – Al Rehla
The Association of Asia Pacific Airlines (AAPA) has warned that high airfares could persist as airlines face rising fuel prices and mounting operating costs, forcing carriers to balance profitability against the risk of discouraging passengers from travelling.
The warning came from AAPA Director General Subhas Menon during the association's 70th Assembly of Presidents, which concluded in Kuala Lumpur on Friday, November 13, 2026.
Fuel Accounts for One-Third of Operating Costs
Menon highlighted the sharp increase in jet fuel prices compared with the previous year, when prices stood at approximately $80 per barrel, before climbing to nearly $180 during the recent surge.
According to market data reported by Reuters, spot jet fuel prices stood at around $148 per barrel on November 13, after retreating from elevated levels recorded in late October.
Fuel currently accounts for approximately 33% of airline operating costs, compared with around 25% before the price surge, placing additional pressure on profit margins.
Higher Airfares Could Weaken Demand
AAPA warned that airlines face a difficult balancing act.
Absorbing higher fuel expenses reduces profitability, while passing those costs on to passengers through higher fares could weaken travel demand.
Passenger traffic among Asia-Pacific airlines recorded year-on-year declines for five consecutive months from April through August, before returning to modest growth in September.
Nevertheless, passenger traffic increased by 1.9% during the first nine months of 2026 compared with the corresponding period of the previous year.
Aircraft Delivery Delays Add Further Pressure
Airlines are also facing delays in deliveries of new aircraft amid a substantial global order backlog.
These delays are forcing some carriers to operate older aircraft for longer, creating additional challenges related to maintenance expenses and fuel efficiency.
Meanwhile, AAPA renewed its call for government support to expand sustainable aviation fuel (SAF) production.
The association reaffirmed its target of achieving 5% SAF use by 2030, despite challenges involving high production costs and limited supplies.
Al Rehla Perspective | What Does This Mean for Travellers?
AAPA's warning does not mean that all airline ticket prices will rise at the same rate or that another round of fare increases is inevitable.
However, persistently high fuel costs could prompt some airlines to adjust ticket prices, fuel surcharges or planned capacity.
Al Rehla recommends that travellers compare the total cost of tickets, including baggage allowances and additional fees, and monitor fares across different travel dates and routes before booking.
Passengers should also avoid assuming that booking early always guarantees the lowest fare, particularly in a market where prices fluctuate according to demand, competition and operating costs.
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