(Updated)

Fernandes: Strong demand will help AirAsia cope with impact of Russia-Ukraine conflict

Fernandes: Fares will be higher due to current higher oil prices, but still relatively cheap due to declining Covid-19 test prices. (Photo by Shahrin Yahya/The Edge)

Fernandes: Fares will be higher due to current higher oil prices, but still relatively cheap due to declining Covid-19 test prices. (Photo by Shahrin Yahya/The Edge)

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KUALA LUMPUR (March 4): AirAsia believes strong demand from travellers will help the budget airline cope with the adverse impact of the Russia-Ukraine conflict.  

"We are not worried about it at the moment because there's more demand than supply. More people want to fly than what we can put on [flights].”

"Fares will be higher due to current higher oil prices, but still relatively cheap due to declining Covid-19 test prices," Capital A Bhd chief executive officer Tan Sri Tony Fernandes told reporters after the launch of the #TimeToListen campaign on Friday (March 4).

He reckoned that the higher oil price trend will be short-term. 

"It will come down once the Russia-Ukraine conflict stabilises, plus there is also a lot of oil that hasn't been released yet and the Organization of the Petroleum Exporting Countries (OPEC) and its allies still produce the same capacity," he noted.

The Brent crude oil price rebounded early on Friday to above US$114 (about RM476.18) per barrel after a contraction of more than 2% on Thursday amid the escalating Russia-Ukraine war. 

On digital banking, Fernandes said the group will continue to carry on its mission to strengthen its financing offering even without a licence from Bank Negara Malaysia (BNM). 

He said the company’s BigPay service had secured a digital money lending licence from the Ministry of Housing and Local Government, allowing it to offer financing products. 

"We are an innovative company. Of course, we want a banking licence, but that's up to BNM, and we think we can give a good service to Malaysia and ASEAN, especially small and medium enterprises," Fernandes said.

The Capital A chief said that besides Malaysia, BigPay is awaiting digital banking licence approvals in Thailand, Indonesia and the Philippines. 

"Inclusivity in AirAsia was flying. Now, inclusivity in Capital A is allowing everyone to get a loan. 

"So, in terms of an ASEAN fintech, we're far ahead of everybody. And if we get a banking licence, [it would be] great. If we don't, we'll just carry on," he added.

BNM will announce the recipients of the digital banking licences this month.