Qantas to close Asian budget airline Jetstar
FILE PHOTO: Qantas Airways chief executive Vanessa Hudson stands in front of a new Jetstar and Qantas Airbus A220 aircraft after announcing half-yearly earnings in a hanger at Sydney’s Kingsford Smith airport on February 22, 2024. (Photo by DAVID GRAY / AFP)
SYDNEY, Australia — Australian airline Qantas said Wednesday it will close its loss-making budget carrier Jetstar Asia, axing 500 Singapore-based jobs.
The low-cost subsidiary will cease operations on July 31 as part of a “strategic restructure”, Qantas group chief executive Vanessa Hudson said.
Qantas is “incredibly proud” of the Jetstar Asia team, Hudson said in a statement.
“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 percent, which has materially changed its cost base.”
Passengers with cancelled flights on the Singapore-based regional carrier — which flies to 16 Asian destinations — will be offered refunds, Qantas said.
Jetstar Asia was expected to make an underlying loss of Aus$35 million (US$23 million) this financial year prior to the closure decision, according to Qantas, which owns 49 percent of the carrier.
The Asian regional carrier’s 500 staff will be laid off and receive redundancy benefits as well as help finding new jobs, the Australian group said.
Jetstar Asia’s 13 A320 aircraft will be progressively redeployed to Australia and New Zealand, Qantas said, creating more than 100 local jobs.
Shutting the carrier would deliver up to Aus$500 million (US$326 million) for Qantas to support the group’s fleet renewal program, it said.
Qantas said the decision to shutter Jetstar Asia was taken together with the offshoot’s 51-percent shareholder, Westbrook Investments.
‘Unsustainable’
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In Manila, Jetstar Asia announced it will soon stop operating its Singapore-Manila flights as the airline will permanently cease operations by July 31.
The airline said that the rising costs from suppliers, airport fees and aviation charges has put an “unsustainable pressure” on the company.
“Following an extensive and careful review of the Jetstar Asia (3K) airline, the very difficult decision has been made to progressively reduce the airlines’ schedule before permanently ceasing operations on 31 July 2025,” the company said.
“Despite our best efforts to offset these rising costs, they are expected to continue into the foreseeable future, putting unsustainable pressure on Jetstar Asia’s ability to offer low fares,” it added.
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The company is currently operating 18 return services from Singapore to Manila per week.
Other affected destinations are Bangkok, Colombo, Denpasar, Kuala Lumpur, Medan, Melbourne and Okinawa, among others.
The closure will not affect Jetstar Airways (JQ) flights or any Jetstar Japan (GK) flights.
Customers with bookings from July 31 onwards can avail of a full refund. – With a report from Tyrone Jasper C. Piad in Manila
