Southeast Asia’s low-cost airlines are expecting some relief from the fuel shock triggered by the Middle East conflict but continue to face a difficult second half of 2026 as high costs squeeze margins and household financial pressures weigh on travel demand.

Recent quarterly results from Malaysia’s AirAsia, Singapore Airlines’ low-cost subsidiary Scoot and the Philippines’ Cebu Pacific highlighted the challenge. Efforts to offset higher fuel expenses through increased fares were insufficient, with AirAsia and Cebu Pacific reporting net losses and Scoot’s operating loss nearly doubling from a year earlier.

The results underline a key vulnerability in the low-cost airline model. Fuel represents a larger portion of expenses for budget carriers than for many full-service airlines, while their price-sensitive customers limit how much fares can be increased without risking weaker demand.

Currency movements have added to the strain. The Malaysian ringgit, Thai baht, Indonesian rupiah and Philippine peso all weakened against the US dollar, raising the cost of fuel and aircraft leases, which are generally denominated in dollars.

“The second quarter was the most challenging operating environment Cebu Pacific has faced post-pandemic,” CEO Mike Szucs said during an earnings call this month.

Cebu Pacific’s fuel costs more than doubled from a year earlier, another company executive said, with the impact intensified by an 8% depreciation in the peso. The airline has hedged about 30% of its third-quarter fuel requirements at less than $120 per barrel to provide some protection against further price volatility.

Full-service carriers have been in a stronger position because of continued demand from premium travellers following the pandemic, according to Nathan Gee, head of Asia-Pacific transportation research at BofA Global Research. Budget airlines have benefited less from that trend because of their simpler service offerings and smaller loyalty programmes, he said.

AirAsia is preparing for a challenging third quarter, traditionally the weakest period for regional travel. The airline plans to reduce seat capacity by 20% to 25% year on year, return 25 older aircraft to lessors during 2026 and suspend its Sydney-Kuala Lumpur service from October as part of a wider network adjustment.

CEO Bo Lingam said AirAsia was taking a “deliberate, tactical approach” to protect profitability after average jet fuel prices reached $183 per barrel in the second quarter. The airline also recorded a net foreign exchange loss of approximately $82 million.

Lingam said AirAsia expects to restore capacity to pre-war levels during the fourth quarter, with forward bookings broadly tracking last year’s levels.

Scoot, meanwhile, has continued expanding capacity as passenger demand remains strong. However, its passenger unit costs increased 21.7% in the three months to June. As a result, the airline’s operating loss widened to S$32 million ($25.2 million), from S$17 million a year earlier, despite higher fares and fuel-hedging protection through parent company Singapore Airlines.

The higher costs pushed Scoot’s break-even load factor to 100%. That means the carrier would have needed every seat occupied to cover passenger operating expenses, compared with an actual load factor of 90.6%.

Scoot Chief Commercial Officer Calvin Chan said the airline’s fare increases had not fully compensated for higher fuel prices, while continued conflict in the Middle East was adding uncertainty to the outlook.

Lower fuel prices could provide immediate relief to airlines, but they could also encourage carriers to restore capacity and compete more aggressively on fares, Gee said.

He added that intra-Asian routes could face particular pressure because supplies of narrowbody aircraft are recovering faster than those of widebody aircraft. Additional capacity could therefore emerge at a time when passenger demand is weakening.

Independent aviation analyst Brendan Sobie also warned that tighter household budgets could reduce travel among Southeast Asia’s middle class during the remainder of the year, including the crucial peak travel season.

“The short-term outlook is rather bleak,” Sobie said, adding that although there is potential for improvement in the fourth quarter, it remains too early to assess the strength or timing of any recovery.

Source: QCAA

Qatar Airways is preparing for a major expansion and fleet modernization programme, with plans to take delivery of 138 new aircraft over the next five years, according to Chief Executive Officer Hamad Ali Al Khater.

Speaking at a media open day on Wednesday, Al Khater outlined the airline’s medium-term strategy as Qatar Airways showcased key facilities at Hamad International Airport, including its Integrated Operations Center, maintenance hangars and Customer Support and Disruption Management Center.

The aircraft pipeline will include Airbus A350-1000s and Boeing 777-9s, while the airline is also preparing to introduce the next-generation Qsuite next summer.

Qatar Airways also plans to receive 50 Airbus A321LR aircraft by the end of the year. The aircraft will allow the carrier to serve secondary markets where operating economics can make larger aircraft less viable.

The airline is further expanding onboard connectivity, with around 150 aircraft expected to be equipped with Starlink high-speed internet. The move is aimed at creating what Qatar Airways describes as the world’s largest connected fleet.

Al Khater said the airline had successfully managed significant regional and global airspace restrictions while maintaining strong passenger demand. Passenger traffic has recovered to between 90% and 95% of last year’s level, alongside high load factors.

The carrier’s destination network has also expanded sharply, growing from 60 destinations to 160 since mid-June. At the same time, daily passenger volumes at Hamad International Airport have exceeded 140,000 as international airlines resume services to Doha.

Operational challenges remain, with airspace congestion currently causing delays of between 10 minutes and one hour. Al Khater said Qatar Airways was fully prepared to manage potential disruptions and mitigate operational risks.

He also highlighted the airline’s response to three major operational shocks over the past two years, including regional airspace closures since late February, the recent Indonesian volcanic eruption that affected 700 passengers, and a major British air navigation IT outage that disrupted hundreds of flights.

The CEO said organizational restructuring was also underway to improve passenger service. A newly established Customer Experience Department will bring together areas including hospitality and catering as part of efforts to strengthen the overall travel experience.

Al Khater also reaffirmed Qatar Airways’ focus on professional development and the advancement of Qatari talent and leadership, which he said would remain important to maintaining the airline’s position on the global aviation stage.

Source: QCAA

flyadeal, the fast-growing low-cost carrier of Saudia Group, will highlight its contribution to Saudi Arabia’s tourism development at World Travel Market (WTM) Riyadh, being held from September 8 to 10, 2026.

The airline will showcase its expanding domestic and international network, which links major cities, emerging destinations and global markets while providing more affordable travel options across the Kingdom.

As Saudi Arabia’s tourism industry continues to expand, flyadeal’s growing fleet and route network are helping improve access to the country’s cultural, heritage, leisure and nature destinations.

The airline will also present its customer-focused approach, competitive fares and initiatives aimed at improving the passenger experience throughout the journey, from booking to arrival.

Sanjiv Kapoor, Acting Chief Executive Officer of flyadeal and Executive Vice President of Strategies at Saudia Group, said Saudi Arabia’s tourism transformation was creating significant opportunities for the aviation sector.

He said flyadeal was supporting the Kingdom’s tourism ambitions by connecting travellers with more destinations across Saudi Arabia and international markets.

Kapoor added that the airline’s expanding network, 47 Airbus A320 aircraft, multiple operating bases, affordable fares and focus on customer service were helping make travel more accessible while contributing to Saudi Arabia’s wider tourism goals.

Source: TradeArabia

Etihad Airways will launch flights to Saudi Arabia’s Red Sea coast on 4 October 2026, adding a year-round leisure destination to its growing network.

The airline will serve Red Sea International Airport in Tabuk Province, allowing passengers from across Etihad’s network to reach the destination with a single connection through Abu Dhabi. The new service will also improve access to the Red Sea from markets across the Gulf and the Indian subcontinent.

The Red Sea will become Etihad’s sixth destination in Saudi Arabia, joining Riyadh, Jeddah, Dammam, Medina and Al Qassim.

Antonoaldo Neves, Chief Executive Officer of Etihad Airways, said the new route would make the type of leisure experience typically associated with long-haul travel more accessible from Abu Dhabi.

“The kind of holiday people normally take a long-haul flight for, islands, reefs and relaxation, is now a short flight from Abu Dhabi and a single connection from anywhere across our network,” Neves said.

Services between Abu Dhabi and the Red Sea will initially operate once a week from 4 October, with frequency increasing to twice weekly from 25 October 2026.

Source: ZAWYA

Jazeera Airways has launched direct flights between Kuwait and Addis Ababa, adding the Ethiopian capital to its growing African network and strengthening connectivity between the two countries.

The inaugural service was marked by a ceremony at Jazeera Terminal 5, attended by Ethiopian Ambassador to Kuwait Dr Sied Jibril and senior Jazeera Airways executives.

The airline will operate three flights per week on the new route, providing greater travel options for more than 70,000 Ethiopian nationals living in Kuwait.

Jibril welcomed the launch, describing the new connection as an important development in the longstanding relationship between Ethiopia and Kuwait. He said direct air links could support tourism, trade, investment and cultural exchanges while making travel easier for the Ethiopian community in Kuwait.

Paul Carroll, Chief Commercial Officer of Jazeera Airways, said Addis Ababa was a strategically important addition to the airline’s network and its first destination in Eastern Africa.

He said the route would serve the Ethiopian community in Kuwait while supporting business, trade and leisure travel between the two countries. Carroll added that Africa represented an important growth market for Jazeera Airways, with the Addis Ababa service strengthening its presence on the continent and providing passengers with connections through Kuwait to other destinations.

Source: ZAWYA

Thai Airways International Public Company Limited (THAI) will operate 66 domestic and international routes under its winter 2026/27 timetable, covering key destinations across Europe, Australia and Asia.

The seasonal schedule will run from October 25, 2026, to March 27, 2027, aligning with Thailand’s peak tourism period.

THAI announced the programme on September 2, 2026, saying it had increased selected services and flight frequencies in response to passenger bookings and travel demand. The airline is also using the winter schedule to strengthen its network connectivity through Bangkok.

The carrier’s winter network will include 15 routes to Europe and Australia, 43 routes across Asia and eight domestic routes.

Source: QCAA