HIT BY RISING COSTS
Jetstar Asia continues to be negatively affected by rising supplier costs, high fees at airports and rising competition in the region, fundamentally challenging its ability to deliver returns comparable to the stronger-performing core markets in the group.
Qantas Group CEO Vanessa Hudson said the company has seen some supplier costs rise by up to 200 per cent, materially changing its cost base.
“I want to sincerely thank and acknowledge our incredible Jetstar Asia team who should be very proud of the impact they have had on aviation in the region over the past two decades,” she said.
Qantas launched the airline over two decades ago in a bid to capitalise on the growing demand for low-cost air travel in Asia.
The low-cost unit has faced intensifying competition from Southeast Asian budget carriers, including Capital A’s AirAsia and Singapore Airlines’ Scoot.
The closure of Jetstar Asia is expected to cost about A$175 million (US$114 million), with approximately a third in the 2025 fiscal year and the remainder across 2026, Qantas said.
The move will also free A$500 million in capital for Qantas to invest in its fleet renewal plans.
“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,” Hudson added.
Jetstar Asia is currently expected to post an underlying loss of A$35 million before interest and taxes in the current financial year.
https://www.channelnewsasia.com/business/jetstar-asia-closure-cease-operations-july-31-qantas-5173836
