Qantas Airways shutters Singapore-based Jetstar Asia on rising costs
SINGAPORE: Australia's Qantas Airways will close its Singapore-based budget airline Jetstar Asia, the group said on Wednesday, blaming rising supplier costs, high airport fees and strong regional competition. The shutdown of the 20-year-old airline next month will result in the loss of up to 500 jobs, a Qantas spokesperson said, and Jetstar Asia's fleet of 13 Airbus A320 planes will be redeployed to Australia and New Zealand. Airlines across Asia, including budget rivals like Singapore Airlines', Malaysia-headquartered AirAsia and Vietnam's VietJet Aviation, have restored and grown their capacity post-pandemic, intensifying competition between carriers and driving airfares down.
Jetstar Asia, which operated 16 intra-Asia routes from Singapore's Changi Airport, has faced growing challenges in recent years and has been unable to deliver returns comparable to stronger-performing core markets within the Qantas group, the company said. The airline has seen 'really high cost increases' at its Singapore base, including double-digit rises in fuel, airport fees, ground handling and security charges, Jetstar Group CEO Stephanie Tully told reporters.
Jetstar Asia, which Tully said reported profits in only six of its 20 years of operation, is expected to post an underlying loss of A$35 million ($22.76 million) before interest and tax in the financial year ending June 30. The airline said Jetstar Asia's closure would release up to A$500 million to be recycled into its core businesses based largely on the value of the 13 planes, including the ability to replace costly leased aircraft that Australia's Jetstar Airways is using domestically.
Jetstar Asia will gradually reduce its schedule before closing on July 31, and customers on cancelled flights will be offered full refunds and moved onto other airlines where possible. Qantas said it would take a one-off financial hit of about A$175 million from Jetstar Asia's closure over two financial years. Qantas shares were trading about 1 percent lower. The group said on Wednesday it continues to see strong demand across its domestic and international businesses.
Cost woes
Tully said Jetstar Asia's cost base was hit particularly hard in the last 18 months to two years. Changi, the world's fourth-busiest airport by international passengers, is steadily raising charges from this year through 2030 to fund investments and higher operating costs. The airport in March 2023 moved Jetstar Asia's operations from Terminal 1 to Terminal 4, the only terminal not connected by train to the other terminals, despite the airline's objections.
'We think it has had an impact on the business,' Tully said. Changi said in a statement it was disappointed by Jetstar Asia's decision to exit Singapore but respected its commercial considerations. Jetstar Asia accounted for around 3 percent of the airport's passenger traffic last year. Changi said it would work with other airlines to fill capacity gaps, including on four routes that no other carrier currently operates.
Australia, New Zealand focus
International operations at Qantas' other budget carriers, Jetstar Airways and Japan-based Jetstar Japan, will not be affected, the airline said. Six of Jetstar Asia's 13 narrow-body aircraft will replace leased aircraft at Jetstar's Australian operations, while four will replace ageing planes Qantas uses to serve the mining industry. Two planes will be deployed to Jetstar in Australia and one in New Zealand to grow capacity and potentially launch new routes, the airline said, in a move that will create more than 100 local jobs.
Employees losing jobs in Singapore will get redundancy benefits and support to find jobs within the Qantas group or other airlines. Singapore's biggest trade union, the National Trades Union Congress, said it was aware of the Jetstar Asia closure ahead of the announcement and was working with Singapore Airlines, the Civil Aviation Authority of Singapore and Changi Airport to find new employment opportunities for the airline's employees. Singapore Airlines said it had set up channels for Jetstar staff to expedite applications for employment within the airline group. - Reuters
Hashtags
Try Our AI Features
Explore what Daily8 AI can do for you:
Comments
No comments yet...
Related Articles
Kuwait Times
2 days ago
- Kuwait Times
Qantas Airways shutters Singapore-based Jetstar Asia on rising costs
SINGAPORE: Australia's Qantas Airways will close its Singapore-based budget airline Jetstar Asia, the group said on Wednesday, blaming rising supplier costs, high airport fees and strong regional competition. The shutdown of the 20-year-old airline next month will result in the loss of up to 500 jobs, a Qantas spokesperson said, and Jetstar Asia's fleet of 13 Airbus A320 planes will be redeployed to Australia and New Zealand. Airlines across Asia, including budget rivals like Singapore Airlines', Malaysia-headquartered AirAsia and Vietnam's VietJet Aviation, have restored and grown their capacity post-pandemic, intensifying competition between carriers and driving airfares down. Jetstar Asia, which operated 16 intra-Asia routes from Singapore's Changi Airport, has faced growing challenges in recent years and has been unable to deliver returns comparable to stronger-performing core markets within the Qantas group, the company said. The airline has seen 'really high cost increases' at its Singapore base, including double-digit rises in fuel, airport fees, ground handling and security charges, Jetstar Group CEO Stephanie Tully told reporters. Jetstar Asia, which Tully said reported profits in only six of its 20 years of operation, is expected to post an underlying loss of A$35 million ($22.76 million) before interest and tax in the financial year ending June 30. The airline said Jetstar Asia's closure would release up to A$500 million to be recycled into its core businesses based largely on the value of the 13 planes, including the ability to replace costly leased aircraft that Australia's Jetstar Airways is using domestically. Jetstar Asia will gradually reduce its schedule before closing on July 31, and customers on cancelled flights will be offered full refunds and moved onto other airlines where possible. Qantas said it would take a one-off financial hit of about A$175 million from Jetstar Asia's closure over two financial years. Qantas shares were trading about 1 percent lower. The group said on Wednesday it continues to see strong demand across its domestic and international businesses. Cost woes Tully said Jetstar Asia's cost base was hit particularly hard in the last 18 months to two years. Changi, the world's fourth-busiest airport by international passengers, is steadily raising charges from this year through 2030 to fund investments and higher operating costs. The airport in March 2023 moved Jetstar Asia's operations from Terminal 1 to Terminal 4, the only terminal not connected by train to the other terminals, despite the airline's objections. 'We think it has had an impact on the business,' Tully said. Changi said in a statement it was disappointed by Jetstar Asia's decision to exit Singapore but respected its commercial considerations. Jetstar Asia accounted for around 3 percent of the airport's passenger traffic last year. Changi said it would work with other airlines to fill capacity gaps, including on four routes that no other carrier currently operates. Australia, New Zealand focus International operations at Qantas' other budget carriers, Jetstar Airways and Japan-based Jetstar Japan, will not be affected, the airline said. Six of Jetstar Asia's 13 narrow-body aircraft will replace leased aircraft at Jetstar's Australian operations, while four will replace ageing planes Qantas uses to serve the mining industry. Two planes will be deployed to Jetstar in Australia and one in New Zealand to grow capacity and potentially launch new routes, the airline said, in a move that will create more than 100 local jobs. Employees losing jobs in Singapore will get redundancy benefits and support to find jobs within the Qantas group or other airlines. Singapore's biggest trade union, the National Trades Union Congress, said it was aware of the Jetstar Asia closure ahead of the announcement and was working with Singapore Airlines, the Civil Aviation Authority of Singapore and Changi Airport to find new employment opportunities for the airline's employees. Singapore Airlines said it had set up channels for Jetstar staff to expedite applications for employment within the airline group. - Reuters
Kuwait Times
04-06-2025
- Kuwait Times
Americans slow to book summer travel amid discount hunting
NEW YORK: This year's hottest summer travel trend? Waiting for deals. Americans are scaling back travel plans from flights to drives or waiting to book only if the price is right, a tell-tale sign of an industry slowdown that's got travel companies worried. Hotel summer bookings are either flat or falling from last year, and airline bookings are down even though airfares have also declined, as economic concerns fuel a pullback in spending. Travel companies including Delta Air Lines, Marriott International, and online travel agency Booking Holdings have withdrawn or revised their 2025 annual forecasts as US demand softens. Airbnb flagged shrinking booking windows as consumers take a 'wait-and-see' approach and book trips closer to their check-in dates. That has left companies with less visibility into the second half of the year. Delta said in early April it was premature to project the full year given macroeconomic uncertainty. United Airlines said there's a reasonable chance that bookings could weaken. 'It's very clear that consumers are waiting to make decisions, including for the summer,' Southwest Airlines CEO Robert Jordan said at the Bernstein Annual Strategic Decisions Conference in late May, adding that demand was stable but lower than expected in January. US summer flight bookings are down 10 percent year-over-year, according to Flighthub, an online travel agency, even though airfares have dropped. 'You can't keep an airline seat on the shelf in a warehouse. If you don't fill that seat tomorrow and the airplane flies, it's gone,' Steve Hafner, CEO of Kayak, a Booking Holdings unit, told Reuters. Average summer flight prices declined 7 percent, with flights to long-haul destinations like Sydney, Australia 23 percent cheaper year-over-year, according to Kayak. Hotel summer bookings in major US cities are flat-to-down year-over-year, according to data from CoStar. Average room rates are expected to rise roughly 1.3 percent in 2025, down from a 1.8 percent increase in 2024. 'Travel is certainly under some pressure because people are not feeling as comfy as they once did,' said Michael Chadwick, CEO of Fiscal Wisdom Wealth Management. Weaker dollar Travelers may start to find deals, such as a free third night for staying two nights, as hoteliers look to fill rooms, said Jan Freitag, national director of hospitality analytics at CoStar Group. That's what Jackie Lafferty is hoping for. Her summer plans have shifted from a possible family vacation in Hawaii or Florida to her home state of California instead. 'By the time we broke down the cost of the flights, the hotel and the rental car, it looked expensive, it felt unreasonable,' said Lafferty, a Los Angeles-based public relations director. The dollar's weakness has driven up the cost of overseas vacations. In March, American travelers surveyed by Deloitte had planned to increase budgets for their longest summer trip by 13 percent. By April, Deloitte's survey found Americans planned on spending about the same as last year. 'The dollar is just not going as far and I think people are starting to realize that,' said Chirag Panchal, CEO of the Ensuite Collection, a Dallas luxury travel concierge. The dollar has fallen about 10 percent since mid-January, when it was its strongest in more than two years. Panchal's clients, who had booked big trips to Europe last year, are either staying domestic or going to closer destinations like Canada or the Caribbean. 'We might go international at the end of the summer. If we do, it will be last-minute and spur of the moment based on cheaper flights,' said Rachel Cabeza, 28, an actor and fitness instructor based in New Jersey. For now, her only summer plan is a getaway to Martha's Vineyard in nearby Massachusetts. — Reuters
Kuwait Times
04-06-2025
- Kuwait Times
‘The Beautiful Game' of football falls for AI's charms
PARIS: Sport has been unable to resist the surge of artificial intelligence and the biggest one of them all, football, is benefitting from data that AI can supply and the human eye cannot. Warsaw-based Vision, which says it is unique in gathering data by using AI, has two immediate goals - women's football and re-igniting Generation Z's interest in watching sports, their co-founder Pawel Osterreicher told AFP. The company - which numbers the South American football body CONMEBOL and their Central American counterparts CONCACAF among their clients - are able to capture data from matches from just a single camera angle. This makes gathering data much cheaper, as players do not need to wear any technology, and there is no need for multiple cameras to capture the data, thanks to AI. Vision's program - which was used at last year's Copa America - was recently awarded FIFA certification. Osterreicher says AI can provide data on aspects of football that humans cannot, such as acceleration, passing lanes, heat maps and zones of control. He said the data can help the 'Goliaths' as well as the 'Davids', just as it did by assisting in second-tier side Wisla Krakow's giantkilling exploits on their way to lifting the Polish Cup in 2024. However, despite this run of success the 36-year-old says he and his colleagues are not aiming for the men's World Cup or this year's men's World Club Cup. Instead they are targeting covering the inaugural women's World Club Cup in 2028, which fits in nicely with another of their aims, to halt the haemorrhage of Generation Z - people born from 1997 to 2012 - watching sports. 'What we see right now in the sports market in general is that women's sport grows at a much faster pace,' he said. 'Of course, from a lower base, but a much faster pace than men's sport. 'You can argue that men's is saturated. But one of the best investment opportunities and development opportunities in sports are currently women's franchises, women's sport and all the media around it.' 'More with less' Osterreicher says this could be a way to reboot the interest of younger viewers 'who are flocking away'. The young 'expect to get excited immediately... I have five seconds and if not, I'm swiping away. 'So women's sport is also potentially an opportunity for sport to attract younger audiences because maybe it's just too boring just to watch all the same setups, all the same guys,' he said. 'So lots of investment is being directed in women's sports and from our perspective as well. We're agnostic. Human is a human. We capture data on humans, not on particular genders. But definitely, more and more customers are asking us to just cover women's leagues.' Osterreicher - who along with his colleagues set up the company five years ago - says he is a 'realist', adding not everyone should use the technology as it is a 'complex thing, it requires certain resources.' Nevertheless Wisla's cup victory showed that you 'can do more with less'. 'You can have a smaller team wisely using technology and then beating the big guys,' he said. He added, though, that it is not a 'silver bullet' as human frailties can come into play. 'A player might have had a row with his wife and be off his game,' he said. While this technology is already tried and tested, Osterreicher and his team are months away from dealing another card to try and claw back the young audience, whose loyalty has switched to TikTok, Netflix and other platforms. 'The way for sports to address it is to create content which is much more to their liking,' he said. 'So you can recreate a game in 3D, which is what we are planning to do. So imagine a legendary goal being scored, or any goal being scored, and you switch to a replay from player perspective. So we are potentially entering the world where sport needs to reinvent itself a little bit, change the way it's being served, in order to not lose those people to TikToks and the video games and mobile games of the world.' — AFP
