Australia – Jetstar Asia, the Singapore-based low-cost subsidiary of Qantas, has announced that it will be shutting down on July 31, citing growing operational challenges and rising competition in the aviation industry across the region.
In a press statement, Qantas 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.
Moreover, 13 Jetstar Asia Airbus A320 aircraft to be progressively redeployed to Australia and New Zealand bringing more low fares and more local jobs
Qantas Group CEO Vanessa Hudson said, “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.”
She added, “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. 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.”
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.
The airline is expected to post a $35 million underlying EBIT loss this financial year, prior to the closure decision.
“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 company stated.
Jetstar Asia was launched in 2004, as a partnership between Qantas, Singaporean businessmen Tony Chew (22%) and FF Wong (10%) and the Singapore government’s investment company, Temasek Holdings (Private) Limited (19%). Currently, Westbrook Investments serves as majority shareholder with 51% share.
