Qantas Airways (ASX: QAN) has announced its 49%-owned Singapore-based low-cost subsidiary Jetstar Asia Airways will close on 31 July.
The airline said the closure would lead to one-off redundancy and restructuring costs and other non-cash expenses of about A$175 million. One third to be taken in the 2025 financial year (FY25) and the remainder in FY26.
Qantas said Jetstar Asia, 51% owned by Singapore company Westbrook Investments, was expected to post a $35 million underlying loss before interest and tax this financial year, prior to the closure decision.
Qantas Group CEO Vanessa Hudson said this was a tough day for the Jetstar Asia team which had worked for more than 20 years to deliver low fares, strong operational performance and exceptional customer service.
“Despite their best efforts, we have seen some of Jetstar Asia’s supplier costs increase by up to 200 per cent, which has materially changed its cost base,” Hudson said in an ASX announcement.
Qantas says the closure would enable it to recycle up to $500 million in capital to support its fleet renewal program, and progressively redeploy 13 Airbus A320 aircraft to Australia and New Zealand to produce low fares and create jobs.
Only 16 intra-Asia routes would be impacted with no changes to Jetstar Airways and Jetstar Japan services into Asia or Jetstar Airways international services in and out of Australia.
Jetstar Asia had faced growing challenges in recent years including rising supplier costs, high airport fees and intensified competition, which had fundamentally affected its ability to deliver returns comparable to the group’s stronger performing core markets.
Jetstar Asia will continue to operate flights for the next seven weeks on a progressively reduced schedule, before its final day of operation on 31 July 2025.
At the time of writing Qantas (ASX: QAN) shares were trading 11 cents (1.03%) lower at $10.53, capitalising the company at $15.95 billion (US$10.37 billion).
