Jetstar Asia to cease operations from July 31, over 500 employees in Singapore affected
SINGAPORE - Singapore-based low-cost airline Jetstar Asia will cease operations on July 31 as part of a 'strategic restructure' by its parent company, Australian flag carrier Qantas.
More than 500 employees in Singapore will be laid off due to the closure, with the airline assuring that it will offer a range of support, including retrenchment benefits and employment opportunities, either within the Qantas Group or elsewhere.
Jetstar Asia said in a statement on June 11 that it will continue to operate flights out of Singapore for the next seven weeks with a progressively reduced schedule until its final day of operations on July 31.
Qantas said 16 intra-Asia routes will be impacted by the closure of Jetstar Asia, with no changes to Jetstar Airways (JQ) and Jetstar Japan (GK) services into Asia.
Jetstar Airways' international services in and out of Australia will also remain unchanged.
Jetstar Asia customers with bookings that are impacted by the announcement will be contacted directly, with the option of a full cash refund or an alternative flight where possible.
The carrier, which operates out of Changi Airport Terminal 4, has set up a dedicated webpage with information for its customers, and its Travel Alert page will be regularly updated with the latest advice.
Jetstar Asia said the decision to cease operations comes amid escalating supplier costs, airport fees and aviation charges in recent years, as well as growing capacity and competition in the region.
The budget carrier is expected to post a loss of A$35 million (S$29.3 million) before interest and taxes this financial year, prior to the decision to shut down.
Qantas chief Vanessa Hudson said some supplier costs have risen by up to 200 per cent.
Jetstar Asia foresees the rising costs to continue in the future, putting 'unsustainable pressure' on the airline's ability to offer low fares, which it said is fundamental to its business model.
Jetstar Asia chief executive John Simeone said: 'Unfortunately, despite our best efforts, the market conditions have ultimately impacted our ability to continue to offer the everyday low fares that are our DNA.'
The Singapore Manual & Mercantile Workers' Union (SMMWU) said it has worked closely with Jetstar Asia's management to ensure affected workers receive fair compensation.
SMMWU secretary-general Andy Lim said the union will support employees by providing job placement assistance and career advisory services across various industries, and financial aid, where necessary.
Changi Airport Group (CAG) said it is disappointed by Jetstar Asia's decision to exit the Singapore market, but respects the carrier's commercial considerations.
'Our immediate priority is to ensure passengers are well-supported and to minimise disruption during the transition period,' the airport operator said in a statement.
Jetstar Asia operates about 180 weekly services at the airport, and carried about 2.3 million passengers in 2024, accounting for about 3 per cent of Changi's total traffic.
Of the 16 routes affected by Jetstar Asia's closure, 12 are served by 18 other airlines offering more than 1,000 weekly services, CAG said.
'We will monitor the routes affected by Jetstar Asia's exit, and where additional capacity is needed, we will actively engage other airlines to fill the gap,' it added.
CAG will also work to restore connectivity to the four destinations served exclusively by the budget carrier from Changi. They are Broome in Australia, Labuan Bajo in Indonesia, Okinawa in Japan and Wuxi in China.
'CAG values its partnership with the Qantas Group and will continue to collaborate with Qantas and Jetstar Airways to support their growth and presence at Changi Airport,' it added.
The Qantas Group will provide support for Jetstar Asia to continue to meet its obligations while operations wind down.
'Jetstar Asia has been part of the Jetstar family for more than 20 years and this is an incredibly difficult and sad day for our people, our customers and the entire Jetstar Group,' said Jetstar Group chief executive Stephanie Tully.
Following the airline's closure, its 13 aircraft will be progressively redeployed across the Qantas Group to support fleet renewal and growth in the Australia and New Zealand businesses in line with underlying demand.
Tell us if you are affected. E-mail us at stnewsdesk@sph.com.sg
Source: The Straits Times © SPH Media Limited. Permission required for reproduction
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