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%, which has materially changed its cost base.”
Passengers with cancelled flights on the Singapore-based regional carrier ‒ which flies to 16 Asian destinations, including Bangkok ‒ will be offered refunds, Qantas said.
Jetstar Asia was expected to make an underlying loss of AUS$35 million (US$23mn) this financial year prior to the closure decision, according to Qantas, which owns 49% 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$500mn (US$326mn) 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% shareholder, Westbrook Investments.
‘UNSUSTAINABLE’
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.
The company is currently operating from Singapore up to 15 return flights a week to Phuket, four return services a week to Krabi and up to 28 return flights a week to Bangkok.
Other affected destinations are Denpasar, Kuala Lumpur, Maila, Melbourne and Okinawa, among others.
The closure will not affect Jetstar Airways (JQ) flights or any Jetstar Japan (GK) flights.
For more information about affected flights, click here.