AirAsia Aid: Malaysia Airlines Calls for Level Playing Field

Malaysia Airlines has said that any AirAsia aid package should also be offered to every other Malaysian carrier. Captain Nasaruddin A. Bakar, group chief executive officer of Malaysia Airlines, set out the position on 12 November in an interview with Bloomberg on the sidelines of the Association of Asia-Pacific Airlines (AAPA) annual meeting in Kuala Lumpur.

“It has to be a fair playing field,” he said. He added: “If it’s given to one airline, it should be given to all other airlines as well.”

The remarks come as Malaysian authorities consider a range of measures to help AirAsia Group Bhd, the low-cost carrier hit hard by high jet fuel prices. The government has so far made no commitment.

Malaysia Airlines ready to add capacity

Nasaruddin said Malaysia Airlines is willing to expand aggressively if AirAsia runs into deeper operational trouble. He said the national carrier “had a duty” to maintain connectivity across the country.

Any such move would require more aircraft and more crew. He said the airline would add capacity only where it is safe and financially sustainable to do so. According to Aviation A2Z, which cited the Bloomberg interview, Malaysia Airlines would first assess the affected routes, operating costs and passenger demand.

The airline already has expansion on its agenda. It plans to lift passenger-carrying capacity by 8% next year and add as many as three destinations, Bloomberg reported. It also aims to finalise an order for up to 20 widebody aircraft as early as this month. People familiar with the matter said it is closing in on a multi-billion-dollar order for Boeing 787 Dreamliners; the airline has not confirmed the order.

Supply remains the constraint. “We are seeing aircraft deliveries being delayed. Not by years, but by months,” Nasaruddin said. Delays could force the airline to hold more spare parts than usual or trim capacity. He nevertheless described the demand outlook as “very strong”.

Where the AirAsia aid talks stand

AirAsia’s difficulties stem largely from fuel. The war involving the United States and Iran has pushed up jet fuel prices and disrupted global aviation, with low-fare airlines among the hardest hit.

In a written parliamentary reply in October, the Ministry of Finance said the government had made no agreement or commitment to provide financing support to AirAsia. That covered guarantees, loans and public fund injections. The ministry said any request would be judged on national and public interest, fiscal sustainability and the protection of public funds.

The ministry also acknowledged AirAsia’s latest quarterly losses, which the airline has attributed mainly to the sharp rise in jet fuel prices. Earlier in October, Reuters reported, citing sources, that AirAsia was in talks with the government over potential funding support.

AirAsia co-founder Tony Fernandes has framed the discussions differently. He told Reuters that his meetings with Finance and Transport ministry officials concerned aviation costs such as airport charges and fuel, not financial assistance.

Investors remain nervous. AirAsia shares fell in September after a report that the government had sounded out rival local carriers, including Malaysia Airlines, about stepping in if AirAsia had to stop flying some routes.

Why it matters for Malaysian aviation

The stakes are high because of AirAsia’s reach. According to the Finance Ministry, the carrier accounted for about 41% of the 104.5 million passenger movements at Malaysia Airports Holdings airports in 2025. It handled almost 60% of domestic passenger movements and is central to air links with Sabah and Sarawak, where it carries 62% and 70% of passengers respectively.

Any state support for one carrier would therefore shape competition across the domestic market. Malaysia Airlines’ call for equal treatment puts that question at the centre of the debate.

For investors, the issue touches several listed names. AirAsia’s share price has reacted sharply to reports on government plans, while Malaysia Airports Holdings relies heavily on its traffic. Regional rivals such as Singapore Airlines are also watching, and late aircraft deliveries mean new capacity is hard to secure across the industry.

Also Read: Dubai Aerospace Enterprise Results: Revenue Rises 13% to $1.45B

The debate also touches public finances. The Finance Ministry has said fiscal sustainability and the protection of public funds will guide its decision on any request for support.

A decision on AirAsia aid is still pending, and the government has not said what form any support might take. Officials have not given a timetable. Malaysia Airlines’ widebody order, which could be finalised this month, and its 8% capacity target for next year will show how far the national carrier is prepared to move if its rival scales back.

For more Malaysian deal news, see our report on the Yinson privatisation offer. Further detail is set out in the original report by The Edge Malaysia.