Qantas announces shock closure of Jetstar Asia
Qantas will cop a $175 million blow to its bottom line after announcing the closure of its struggling Singapore-based Jetstar Asia,
But the Flying Kangaroo says the strategic restructure will allow it to divert up to $500m in fleet capital into its more profitable core domestic and international services.
Jetstar Asia offers intra-Asia flights from Kaula Lumpur to locations including Colombo in Sri Lanka, Bali, Medan, Surabaya and Jakarta in Indonesia, Bangkok, Phuket and Krabi in Thailand, Haikou and Wuxi in China, Penang in Malaysia, Clark and Manila in the Philippines and Osaka Japan via a connecting flight through Manilla.
'Jetstar Asia ... has faced growing challenges in recent years and the decision has been made, together with majority shareholder Westbrook Investments, to close the airline,' Qantas said on Wednesday.
'Despite delivering exceptional customer service and operational reliability; Jetstar Asia has been impacted by rising supplier costs, high airport fees, and intensified competition in the region. This has fundamentally challenged the low-cost airline's ability to deliver returns comparable to the stronger performing core markets in the group.'
Qantas said Jetstar Asia was expected to post a $35 million underlying earnings loss this financial year.
'Jetstar Asia will continue to operate flights for the next seven weeks on a progressively reduced schedule, before its final day of operation on 31 July 2025,' Qantas Group said.
Qantas Group CEO Vanessa Hudsaon said she was 'incredibly proud of the Jetstar Asia team.
'Jetstar Asia has been a pioneering force in the Asian aviation market for more than 20 years, making air travel accessible to millions of customers across Southeast Asia,' she 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.'
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