Intra-Asia airline, Jetstar Asia, will cease operations on July 31, as parent Qantas Group embarks on a strategic restructure to support its historic fleet renewal programme and strengthen its core businesses in Australia and New Zealand.
In a press statement issued early this morning, Qantas Group said the closure of Jetstar Asia would enable the group to recycle up to A$500 million (US$326.4 million) in capital, supporting its historic fleet renewal programme.
The move will allow 13 Jetstar Asia Airbus A320 aircraft to be progressively redeployed to Australia and New Zealand, bringing about more low fares and more local jobs.
Sixteen intra-Asia routes operating out of Singapore will be impacted by the closure of Jetstar Asia, while services operated by Jetstar Airways and Jetstar Japan into Asia will not be affected. All of Jetstar Airways international services in and out of Australia also remain unchanged.
Qantas Group noted that Jetstar Asia has faced growing challenges in recent years. Despite delivering exceptional customer service and operational reliability, Jetstar Asia has been impacted by rising supplier costs, high airport fees, and intensified competition in the region. 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 EBIT loss this financial year, prior to the closure decision.
In the lead up to the July 31 closure, the airline will operate on a progressively reduced schedule. Customers with existing bookings on cancelled flights will be offered full refunds and the group will look to accommodate customers onto other airlines where possible.
All affected 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.
