Qantas Airways Group has announced the closure of its Singapore-based Jetstar Asia subsidiary, as part of a strategic restructure.
Qantas Airways Group has announced the closure of its Singapore-based Jetstar Asia subsidiary, as part of a strategic restructure.
Vanessa Hudson-led Qantas told the market that the closure of the airline would result in up to $500 million capital being recycled and able to support its fleet renewal program.
The company said 13 Jetstar Asia Airbus A320 aircraft would be gradually redeployed throughout its Australia and New Zealand-based routes – a move which it says will allow for lower fares and aid local employment.
Jetstar Asia, which is tipped to generate an underlying earnings before interest and tax loss in FY25 between $25-35 million, will officially cease operating on July 31 – although its number of flights during the next seven weeks will gradually decrease.
"We are incredibly proud of the Jetstar Asia team and the work they have done to deliver low fares, strong operational performance and exceptional customer service,” Ms Hudson.
"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 per cent, which has materially changed its cost base."
Overall, Qantas said the combined impact of the move would cost in the vicinity of $175 million, with direct pre-tax impact approximately $160 million.
A third of this will be incurred during FY25, with the rest in FY26, all outside of underlying earnings.
As of 9.28am AWST, Qantas shares were down 2 per cent to $10.44.
