AUSTRALIA: Qantas Group announced on 11 June 2025 a significant strategic restructure, including the closure of its Singapore-based low-cost airline, Jetstar Asia, to support its historic fleet renewal and strengthen its core businesses in Australia and New Zealand.
The closure will allow Qantas Group to recycle up to US$500 million in capital, which will be redirected towards modernising its fleet and improving long-term returns.
Thirteen Jetstar Asia Airbus A320 aircraft will be progressively redeployed to Australia and New Zealand.
This redeployment is expected to create over 100 new jobs in these core markets and enable Jetstar Airways to offer more low fares.
Some aircraft will also support Qantas’ regional operations, particularly servicing Western Australia’s critical resources sector.
Jetstar Asia, which has operated for over 20 years, faced mounting financial pressures due to rising supplier costs, high airport fees, and intensifying competition within the region.
Rising supplier costs render Jetstar Asia financially unsustainable
According to Qantas Group, supplier costs for Jetstar Asia increased by up to 200 percent, severely impacting the airline’s cost structure and profitability.
Qantas Group CEO Vanessa Hudson acknowledged the contribution of the Jetstar Asia team, stating, “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 added, “Despite their best efforts, we have seen some of Jetstar Asia’s supplier costs increase by up to 200 percent, which has materially changed its cost base.”
Jetstar Asia is projected to post an underlying EBIT loss of US$35 million this financial year, prior to the closure decision.
The airline will continue operating flights on a reduced schedule over the next seven weeks, with its final day of operation scheduled for 31 July 2025.
Closure limited to Singapore-based routes; Other Jetstar operations unaffected
The closure affects only Jetstar Asia’s intra-Asia routes from its Singapore hub.
Jetstar Airways’ domestic and international operations in Australia and New Zealand, as well as Jetstar Japan, remain unaffected.
Jetstar Airways will continue servicing destinations in Asia, including Singapore, Thailand, Indonesia, Vietnam, Japan, and South Korea.
Qantas Group has assured that customers holding existing bookings on affected Jetstar Asia flights will be offered full refunds or rebooking options on other carriers where possible.
Impacted employees will receive redundancy benefits and employment support, with Qantas actively exploring redeployment opportunities within the Group and with other airlines in the region.
Singapore remains a crucial hub for the Qantas Group, serving as its third-largest international airport.
The Group maintains nearly 20 codeshare and interline partnerships across Asia through Singapore, ensuring connectivity for its passengers despite the Jetstar Asia closure.
Qantas Group is currently undertaking one of the most ambitious fleet renewal programs in its history, with nearly 200 firm aircraft orders.
This includes the delivery of its first Airbus A321XLR later this month and the arrival of its first Project Sunrise Airbus A350-1000ULR in 2026.
Hudson highlighted the importance of disciplined capital allocation, saying, “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.”
The closure of Jetstar Asia will incur one-off redundancy and restructuring costs, along with non-cash expenses related to foreign currency translation losses and fleet structure adjustments.
The combined financial impact is estimated at US$175 million, with around one-third affecting FY25 and the remainder in FY26.
Direct pre-tax cash impacts are projected at approximately US$160 million, primarily in FY26.
However, Qantas anticipates offsetting these costs through working capital benefits from growth in Jetstar Airways and tax adjustments.
Financially, Jetstar Asia’s performance worsened in the second half of FY25, posting an underlying EBIT loss of US$25 million.
Group Domestic capacity growth was lower than anticipated due to disruptions from Cyclone Alfred, which struck Queensland in March and reduced earnings by US$30 million.
Group International capacity is forecast to grow by 9 percent, slightly below previous guidance due to industrial action affecting Qantas’ Finnair wet lease operations.
Nevertheless, strong demand continues across both Domestic and International markets, with unit revenue and capital expenditure expected to remain in line with earlier guidance.
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