Qantas will shut down Jetstar Asia more than two decades after the budget airline launched in Singapore.
The announcement to the ASX on Wednesday came as Jetstar Asia struggled with rising costs and competition in the region, and was expected to post a $35million EBIT loss this financial year.
Qantas will redirect the 13 Jetstar Asia Airbus A320 aircraft to routes in Australia and New Zealand. Around 500 jobs could be axed from the Singapore-based airline.
All affected employees would be provided with redundancy benefits, the airline said.
The move will free up $500million for it to invest in fleet renewal plans.
Qantas Group CEO Vanessa Hudson said Jetstar Asia’s supplier costs had increased by ‘up to 200 per cent’.
‘We are currently undertaking the most ambitious fleet renewal program in our history, with almost 200 firm aircraft orders and hundreds of millions of dollars being invested into our existing fleet,’ Ms Hudson added.
‘We’re making disciplined decisions which recycle capital across our business and prioritise it to stronger performing segments as well as strategic growth initiatives like Project Sunrise.’
Qantas Group CEO Vanessa Hudson (pictured) said Jetstar Asia’s supplier costs had increased by ‘up to 200 per cent’
Qantas will shut down Jetstar Asia more than two decades after the budget airline launched in Singapore
Qantas will receive its first Airbus A321XLR later this month and the first Project Sunrise A350-1000ULR in 2026.
Jetstar Asia will continue flights for the next seven weeks and cease operating on July 31.
Jetstar Japan and Jetstar Airways’ operations in Australia and New Zealand will not be impacted.
Singapore remains a critical hub for Qantas Group as its third most-used international airport.
