PETALING JAYA: AirAsia X Bhd
(AAX) is expected to post a weak performance in the second quarter of financial year 2026 (2Q26).
However, beyond 2Q26, its operating environment is expected to normalise as geopolitical uncertainties ease, with stronger growth anticipated towards the seasonally peak demand period in 4Q26.
Hong Leong Investment Bank (HLIB) Research said the group’s anticipated softer performance in 2Q26 is primarily due to a sharp spike in jet fuel prices, softer travel demand and the US dollar appreciation as the Iran conflict intensified during the quarter.
“AAX’s balance sheet should still be able to absorb the expected losses (avert Practice Note 17 status), supported by its positive shareholders’ equity of RM872.5mil (as at March 2026).
“In addition, AAX is likely to benefit from margin expansion in June, as ticket sales were largely priced based on US$160 per barrel jet fuel prices, while actual jet fuel prices have since declined to below US$120 per barrel,” the research house said in a report yesterday
It noted the United States and Iran had reportedly reached a peace agreement to end the conflict that began in late February, with a formal signing ceremony scheduled for June 19, 2026 in Switzerland.
HLIB Research said in tandem with the decline in Brent crude oil prices (currently at US$83 per barrel), jet fuel prices have also eased to below US$120 per barrel, significantly lower than the peak of US$220 per barrel recorded in March.
It said the lower jet fuel price environment is favourable for the aviation sector, particularly AAX. It maintained its “buy” call on the stock with an unchanged target price of RM2.20 per share.
