Qantas has announced plans to close its Singapore-based low-cost carrier Jetstar Asia by the end of July, as rising costs, increased competition and uncertainty linked to the global economy eroded the regional airline’s profits.
The closure will affect 16 routes within Asia, and comes as the subsidiary is expected to post a $35 million underlying loss this year.
Jetstar Airways will continue to fly from Australia into Asian destinations such as Singapore, Thailand, Indonesia, Vietnam, Japan and South Korea.
Qantas is shutting down its Jetstar Asia operations.
Closing the Singapore division now will free up 13 Jetstar Asia Airbus A320 aircraft to be redeployed primarily within Australia. The change will eliminate 500 jobs in Singapore but create 100 jobs in Australia, the company said.
Qantas CEO Vanessa Hudson said: “We are incredibly proud of the Jetstar Asia team and the work they have done to deliver low fares, strong operational performance and exceptional customer service. This is a very tough day for them.”
“Despite their best efforts, we have seen some of Jetstar Asia’s supplier costs increase by up to 200 per cent, which has materially changed its cost base,” she said.
The announcement comes on the eve of Virgin Australia’s re-emergence as a listed company, which is expected to compete more heavily in the domestic market, helped by cornerstone investor Qatar Airways.
Qantas said that nine of the aircraft will go to Jetstar, adding three to the domestic fleet, while six will replace leased Jetstar aircraft. One of the planes will be deployed to New Zealand, while four will be used by QantasLink to serve the fly-in-fly-out market for miners.
Aviation analyst and former Qantas economist Tony Webber said: “Jetstar is growing quickly in Australia so it makes sense to pull [the aircraft] into the Australian domestic market.”
Jetstar only had 13 aircraft in the fleet, so the company did not get to the scale needed to be competitive on cost.
With Virgin Australia set to float on the ASX on June 24, aviation analyst Peter Harbison described the timing of Qantas’ announcement as “interesting”.
The Qantas announcement “will mean having an extra nine aircraft in the domestic market in a couple of months’ time,” he said.
“It will make a significant difference to the capacity and therefore, we presume, the pricing offers that Jetstar can make,” he said.
The closure of the airline will cost Qantas about $175 million to pay for the reorganisation, staff redundancies and fleet writedowns, with about a third of that booked this financial year and the rest accounted for in financial year 2026.
Jetstar Asia customers with existing bookings on cancelled flights will be offered full refunds and the company will seek alternative flights.
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