02/04/2026
KUALA LUMPUR (April 2): Batik Air Malaysia will cut 35% of its scheduled flights in the first half of April, joining a growing list of global carriers scaling back operations to cushion the hit from soaring fuel costs driven by geopolitical tensions in the Middle East.
Chief executive officer Datuk Chandran Rama Muthy said in an internal memo to staff dated April 1 that the reduction is a precautionary move to conserve resources as jet fuel prices climb to historic highs.
The Malaysia-based hybrid airline will also offer voluntary unpaid leave to employees, with applications open until April 3 for leave starting April 6. Batik Air Malaysia employs about 3,500 staff.
Global jet fuel prices have nearly doubled since late February, according to S&P Global Platts data, with the average reaching US$195.19 per barrel for the week ended March 27, up 104% from a month earlier. The spike has sharply increased operating costs across the aviation sector, while airspace restrictions in the Middle East continue to disrupt global travel patterns.
“The aviation industry is currently facing significant headwinds due to escalating geopolitical tensions in the Middle East. These developments have led to extreme fuel price volatility and disrupted global supply chains,” Chandran said in the memo sighted by The Edge.
When contacted by The Edge, Chandran confirmed the move, adding that the airline plans to reduce capacity by 35% through April 12, after which it will review the situation.
He said the cuts will focus on reducing flight frequencies rather than eliminating destinations.
“We are taking a careful approach to ensure minimal impact on our operations. For example, instead of operating three flights, we may reduce it to two. While frequencies on certain routes will be adjusted, the destinations we currently serve will remain unchanged,” Chandran said.
“Flights between Kuala Lumpur and Penang, for example, will be reduced from five daily services to two, while KL-Kota Kinabalu services will be cut from three to two. Similar reductions have been made on longer-haul routes such as KL-Kathmandu and KL-Perth, where frequencies have been trimmed to limit fuel consumption,” he added.
Some planned route launches may be postponed, although the airline is maintaining its expansion plans. Batik Air Malaysia recently launched a KL-Colombo service and is scheduled to begin flights from KL to Shanghai in June.
In addition to trimming capacity, the airline has frozen non-essential staff travel and deferred training programmes that are not safety- or regulatory-critical.
A number of carriers including Malaysia Airlines, Firefly, Batik Air Malaysia, Hong Kong Airlines, Air India and Hong Kong's Cathay Pacific Airways Ltd have announced fare and fuel surcharge increases in response to the rising fuel bill.
Chandran said while higher fuel surcharges have been implemented, they are insufficient to fully offset rising costs. Fuel, which previously accounted for about 30% to 35% of Batik Air Malaysia’s operating expenses, now represents roughly 50% to 55%.
“As Transport Minister Anthony Loke recently pointed out, the government is operating in ‘crisis mode’ in response to the ongoing war in the Middle East. One way for us is to manage our capacity. We cannot be thinking everything is normal and then doing business is normal and tomorrow we are not prepared. It's just a temporary adjustment to our schedule,” he said.
No plans to hedge fuel costs despite rising oil prices
Despite the volatility, Batik Air Malaysia has no hedging contracts in place, leaving it fully exposed to fuel price fluctuations.
Chandran said the airline is cautious about adopting hedging strategies, citing risks seen in the industry when prices fall below contracted levels.
“We have seen airlines that have incurred a lot of loss due to hedging before. As such, we are very careful to go on that route,” he said.
Malaysia Airlines suspended its flights to Doha, Jeddah, and Madinah on Feb 28. However, flights to Jeddah and Madinah resumed on March 8, while services to Doha remain suspended until April 15 due to regional airspace closures.
Other carriers in the region are also adjusting operations. Vietnam Airlines has reportedly suspended several services from April 1, cancelling 23 weekly flights as it responds to fuel supply pressures.
Batik Air Malaysia operates about 1,400 weekly flights to more than 60 destinations across 21 countries. Its fleet includes seven Airbus A330-300 aircraft and 47 Boeing 737-8 and 737-800 aircraft.
Chandran said the airline remains financially sound but is taking proactive steps to ensure long-term sustainability amid ongoing uncertainty.
“One good thing is everyone in the ecosystem is discussing how we can walk through this together; because we cannot afford to forego one player or another. That is actually a positive spirit that we are seeing today among our suppliers,” he noted.
