KUALA LUMPUR: Malaysia Aviation Group (MAG) has secured sufficient fuel supply to sustain operations until the end of 2026, despite growing concern over shortages and rising oil prices globally.
The assurance comes amid concerns that some regional carriers may face fuel constraints as early as mid-year due to supply disruptions.
President and group chief executive officer Captain Nasaruddin A Bakar said MAG’s position is supported by contractual supply arrangements across both domestic and international markets.
"We have secured commitments from our suppliers, both domestic and international…certain states and certain countries have a limitation in terms of the fuel uplift,” he told a press conference at the MAG 2025 Financial Performance here today.
He said MAG has been optimising fuel management by procuring additional fuel from selected stations to ensure uninterrupted operations.
At the same time, Nasaruddin said the group is actively managing cost risks through a disciplined fuel hedging strategy to cushion against price volatility.
He said the group has hedged approximately 36 per cent of its fuel requirements for the first quarter of 2026, increasing to about 50 per cent in the second quarter.
Group chief financial officer Boon Hui Yee said the group employs a collar hedging strategy that caps exposure while allowing flexibility if fuel prices decline.
"We went into what we call collar hedge… it will not go beyond US$80 per barrel, but it could be lower if the fuel price is lower.
"Hedging too much could be detrimental if the fuel price drops… we have put a number that we believe is quite optimised,” she said.
Meanwhile, Nasaruddin said fuel remains a key cost driver for the group, accounting for about 40 per cent of operating expenses, with prices recently surging to about 140 per cent amid geopolitical tensions.
Despite the challenging environment, he said MAG will continue to review and adjust its operations to maintain financial performance for 2026.
"We are actively reviewing and also adjusting accordingly to ensure that we can maintain the financial performance,” he added. - Bernama
