Qantas shuts loss-making Asian budget carrier  

Qantas Group is to close down Singapore-based budget carrier Jetstar Asia.

The loss-making low-cost subsidiary will progressively reduce its schedule before its final day of operation on July 31.

The 13 Jetstar Asia Airbus A320 aircraft will be redeployed to Australia and New Zealand.

Sixteen routes in Asia routes will be impacted by the closure, with no changes to Jetstar Airways and Jetstar Japan services into Asia. 

All of Jetstar Airways international services in and out of Australia remain unchanged.

Qantas, which runs Jetstar Asia with majority shareholder Westbrook Investments, said the carrier has faced “growing challenges” in recent years.

“Jetstar Asia has been impacted by rising supplier costs, high airport fees, and intensified competition in the region,” the group said.  

“This has fundamentally challenged the low-cost airline’s ability to deliver returns comparable to the stronger performing core markets in the group.”

The airline is expected to post a A$35 million underlying loss this financial year, prior to the closure decision.

Jetstar Asia customers with existing bookings on cancelled flights will be offered full refunds. The group will look to reaccommodate customers onto other airlines “where possible”.

Jetstar Asia employees will be provided redundancy benefits as well as employment support services. 

Qantas “is also actively working to find job opportunities across the group and with other airlines in the region”.

Jetstar Asia will continue to meet its financial obligations to suppliers, employees and customers, with the support of Qantas, a statement said.

Group chief executive Vanessa Hudson said: “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.

“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%, which has materially changed its cost base.”