Qantas Group to Shut Down Jetstar Asia Operations

Skift

a day ago

Moral of the story: Being low-cost is no longer enough. Without scale, efficiency, and solid financial backing, it's getting harder for smaller airlines to stay in the game — especially with the kind of cut-throat competition we're seeing in the region.
The Qantas Group on Wednesday announced the closure of operations of Jetstar Asia, its low-cost Singapore-based airline, by the end of July. The decision, made with majority shareholder Westbrook Investments, comes after years of mounting pressure on the carrier's cost base and operating environment.
The shutdown will displace more than 500 staff based in Singapore. Qantas has committed to offering redundancy packages and job placement assistance, both within the Qantas Group and with other airlines in the region.
Jetstar Asia, which currently operates 16 routes across Asia including to Thailand, Indonesia, the Philippines, and Sri Lanka, will wind down with a reduced schedule between now and July 31.
This does not impact Jetstar Airways' domestic and international operations in Australia and New Zealand or Jetstar Japan.
Despite the closure, Qantas is not exiting Singapore. The city remains its third-largest international hub. The group will continue to serve the market through Qantas-operated flights and a network of nearly 20 codeshare and interline partners.
Jetstar Airways will continue to fly from Australia into Asia to all its popular destinations across Singapore, Thailand, Indonesia, Vietnam, Japan and South Korea, Qantas Group said in statement.
What Led to the Decision?
Listing some of the reason, the airline said it has been hit hard by rising airport charges, supplier costs, and fierce competition. Qantas Group CEO Vanessa Hudson stated, 'We have seen some of Jetstar Asia's supplier costs increase by up to 200%, which has materially changed its cost base.'
Qantas Group forecasts Jetstar Asia to record a $35 million underlying EBIT loss this financial year.
The group said it is reallocating up to $500 million in fleet capital unlocked from Jetstar Asia into its core businesses to improve long-term returns.
Thirteen of Jetstar Asia's mid-life Airbus A320s will be repurposed. Some will support Jetstar's domestic growth, while others will bolster Qantas' regional operations in Western Australia, particularly in the resources sector.
The move also supports Qantas' largest-ever fleet renewal program, with the first A321XLR joining the fleet later this month and the long-range A350-1000s arriving from 2026 under Project Sunrise.
Project Sunrise is Qantas' plan to launch non-stop flights from Australia's east coast to London and New York from 2026, using specially configured Airbus A350-1000s to cut travel time by up to four hours.
Hudson said, 'We're making disciplined decisions which recycle capital across our business and prioritise it to stronger performing segments as well as strategic growth initiatives.'
She also highlighted that Qantas is in the midst of its 'most ambitious fleet renewal program in history,' with nearly 200 aircraft on order and the group making significant investment to upgrade the fleet.
Lessons from Thai Smile's Exit
The decision mirrors the recent closure of Thai Smile Airways by Thai Airways. That budget carrier also faced persistent losses, totaling over THB 20.9 billion across 12 years. Despite its initial promise, Thai Smile struggled to establish sustainable financial performance and was eventually dissolved earlier this month.
While Jetstar Asia is not a long-term financial drag on the same scale, both closures reflect broader challenges for low-cost carriers in Asia. Tight margins, high fees, and volatile demand are making it harder for smaller regional brands to compete, especially as full-service carriers consolidate operations to regain profitability.
Support Measures
Jetstar Asia CEO John Simeone, who joined the airline last year from parent company Qantas, acknowledged the challenges: 'Unfortunately, despite our best efforts, the local market conditions have ultimately impacted our ability to continue to offer the everyday low fares that are our DNA.'
The airline has said it would issue full refunds for cancelled flights, including those scheduled after July 31. The airline will be contacting customers impacted by the reduced flying schedule over the next seven weeks with options.
Jetstar Asia has also published a dedicated support page for refunds, flight changes, and updated schedules. The Jetstar website's "Travel Alerts" section also offers the latest updates.