Qantas to Close Its Low-cost Subsidiary Jetstar Asia

Australia’s Qantas Group on Wednesday announced the closure of its Singapore-based low-cost subsidiary intra-Asia airline Jetstar Asia for a strategic restructure which supports its historic fleet renewal program and strengthens its core businesses in Australia and New Zealand.

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. The airline is expected to post a $35 million underlying EBIT loss this financial year, prior to the closure decision.

Qantas Group said that the decision was taken to recycle capital to drive improved returns and support fleet renewal as disciplined allocation of capital has been is a key pillar in its Financial Framework.

The closure of intra-Asia airline, Jetstar Asia, enables the Qantas Group to recycle up to $500 million in capital, supporting its fleet renewal program. As many as 13 Jetstar Asia Airbus A320 aircraft are to be progressively redeployed to Australia and New Zealand bringing more low fares and more local jobs.

Qantas Group said that only 16 intra-Asia routes will be impacted by the closure of Jetstar Asia with no changes to Jetstar Airways and Jetstar Japan services into Asia. All of Jetstar Airways international services in and out of Australia remain unchanged.

Jetstar Asia’s Troubles

Jetstar Asia has faced growing challenges in recent years and the decision has been made, together with majority shareholder Westbrook Investments, to close the airline.

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 closure of Jetstar Asia only impacts the intra-Asia routes operated by the airline from its base in Singapore.

It does not impact Jetstar Airways’ domestic and international operations in Australia and New Zealand or Jetstar Japan. Jetstar Airways will continue to fly from Australia into Asia including to all its popular destinations across Singapore, Thailand, Indonesia, Vietnam, Japan and South Korea.

Qantas Group CEO Vanessa Hudson said that Jetstar Asia has been a pioneering force in the Asian aviation market for more than 20 years, making air travel accessible to millions of customers across Southeast Asia.

“We are proud of the Jetstar Asia team and the work they have done to deliver low fares, strong operational performance and exceptional customer service. 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,” Vanessa said.

Jetstar Asia customers with existing bookings on cancelled flights will be offered full refunds and the Group will look to reaccommodate 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.

With the support of Qantas, Jetstar Asia will continue to meet its financial obligations to suppliers, employees and customers.

These strategic fleet decisions come as Qantas receives its first Airbus A321XLR later this month and the first Project Sunrise A350-1000ULR in calendar year 2026.

“We are currently undertaking the most ambitious fleet renewal program in our history, with almost 200 firm aircraft orders and hundreds of millions of dollars being invested into our existing fleet,” Vanessa said.

Financial Impact

The closure of Jetstar Asia will result in one-off redundancy and restructuring costs as well as the non-cash expensing of historical foreign currency translation losses from equity reserves and asset write-downs from consequential changes in the Group’s fleet structure.

The combined impact is currently estimated to be approximately $175 million with approximately a third in FY25 and the remainder across FY26, which will be taken outside of underlying earnings.

The direct pre-tax cash impact will be approximately $160 million, predominantly in FY26, including unwinding Jetstar Asia’s working capital.

This will be materially mitigated by working capital benefits from growth in Jetstar Airways utilising the redeployed aircraft, and from consequential tax adjustments impacting tax payments across the Group in FY26 and future years.