Qantas will close its low-cost carrier Jetstar Asia by the end of July, saying rising costs, increased competition and high airport fees eroded the regional airline’s profits.
The closure will only affect intra-Asia routes operated by Jetstar from its Singapore base, with 16 routes affected. The company’s domestic and international operations in Australia and New Zealand, and Jetstar Japan will not be affected.
Jetstar flies passengers to popular holiday destinations in Asia, like Bali.Credit: Wolter Peeters
The Singapore-based airline’s performance had deteriorated since the start of the year to a point at which it would weigh down Qantas’ result with a $25 million underlying loss this financial year, Qantas said in a statement to the ASX this morning.
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Its troubles compound a disappointing outcome from Qantas’ core domestic and international operations in the June half.
In a trading update, the airline warned capacity growth in its domestic network was lower than expected, largely due to Cyclone Alfred which affected flights over large parts of Queensland and wiped out $30 million in earnings.
International flight capacity growth will also fall short of previous forecasts, due to a strike at Qantas’ partner airline Finnair, it said.
Jetstar Asia will run its flights across Asia for the next seven weeks on a progressively reduced schedule before its final grounding on July 31.
Its 13 Airbus A320 planes will be redeployed to Australia and New Zealand to support Qantas’ fleet renewal and replace leased planes on Jetstar’s domestic routes.
The closure of the airline will cost Qantas about $175 million to pay for the reorganisation, staff redundancies and fleet writedowns, with about a third of that booked this financial year and the rest accounted for in financial year 2026.
Jetstar Asia customers with existing bookings on cancelled flights will be offered full refunds and the company will seek alternative flights.
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