KUALA LUMPUR, April 2 — Batik Air Malaysia will reduce 35 per cent of its scheduled flights in the first half of April, joining other carriers worldwide in scaling back operations to manage the impact of rising fuel costs amid Middle East tensions.

In an internal memo dated April 1, CEO Datuk Chandran Rama Muthy outlined the reduction as a precautionary step to manage resources while jet fuel prices reach historic highs, according to The Edge.

The hybrid airline, which employs around 3,500 staff, will also offer voluntary unpaid leave, with applications open until April 3 for leave beginning April 6.

Global jet fuel prices have nearly doubled since late February, reaching an average of US$195.19 per barrel for the week ended March 27, according to S&P Global Platts data — up 104 per cent from a month earlier. 

The surge has sharply increased operating costs for airlines, while airspace restrictions in the Middle East continue to disrupt global travel.

“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.

Chandran confirmed the airline plans to cut capacity by 35 per cent through April 12, after which it will reassess the situation. He added that the reductions will focus on flight frequencies rather than cancelling destinations entirely.

“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,” he said.

Flights between Kuala Lumpur and Penang, for instance, will drop from five daily services to two, while KL-Kota Kinabalu flights will be cut from three to two. 

Longer-haul routes such as KL-Kathmandu and KL-Perth will also see trimmed frequencies to limit fuel consumption.

Some planned route launches may be postponed, though expansion plans remain in place. 

The airline recently began a KL-Colombo service and is scheduled to launch flights to Shanghai in June.

Non-essential staff travel has been frozen, and training programmes that are not safety- or regulatory-critical have been deferred.

Other carriers, including Malaysia Airlines, Firefly, Hong Kong Airlines, Air India, and Cathay Pacific, have also raised fares and fuel surcharges in response to the rising fuel bill.

Chandran said while fuel surcharges have been implemented, they do not fully offset the rising costs. 

Previously accounting for 30 to 35 per cent of operating expenses, fuel now represents roughly 50 to 55 per cent of Batik Air Malaysia’s costs.

“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 assume everything is normal and do business as usual. It's just a temporary adjustment to our schedule,” he said.

Despite the volatility, Batik Air Malaysia has no fuel hedging contracts, leaving it exposed to price fluctuations. Chandran said the airline remains cautious, noting that hedging has caused losses for other carriers when prices drop below contracted levels.

Batik Air Malaysia operates about 1,400 weekly flights to over 60 destinations across 21 countries, with a fleet comprising seven Airbus A330-300s and 47 Boeing 737-8 and 737-800 aircraft.

Chandran said the airline remains financially stable but is taking proactive measures 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 added.