Qantas to Close Jetstar Asia, Cancels 16 Routes from Singapore

SYDNEY- Qantas Group (QF) has revealed plans to discontinue its Singapore-based low-cost subsidiary, Jetstar Asia (3K), with operations ceasing on July 31, 2025. This strategic decision is in alignment with the Group’s fleet renewal and capital reallocation strategy.

The closure will impact 16 intra-Asia routes originating from Singapore Changi Airport (SIN). However, services operated by Jetstar Airways (JQ) and Jetstar Japan (GK) to and from Asia will remain unaffected.

Jetstar Asia, which has been a significant player in Southeast Asia’s budget travel market for more than 20 years, is shutting down due to escalating supplier costs—some increasing by up to 200%—and intensified competition in the region.

While the airline has a history of providing dependable service, it struggled to achieve the profitability levels of Qantas Group’s primary operations in Australia and New Zealand.

The airline is projected to incur a $35 million underlying EBIT loss for FY25. The phased wind-down of operations will take place over seven weeks, concluding on July 31, 2025.

Customers who are affected will have access to full refunds or the option to rebook with alternative carriers, while employees will be offered redundancy support and assistance in finding new roles within the Qantas Group or other regional airlines.

Redeployment of Resources

The closure will enable Qantas Group to reallocate up to $500 million in capital. Thirteen Jetstar Asia Airbus A320 aircraft will be redirected to Jetstar Airways and QantasLink services within Australia and New Zealand. This redeployment aims to:

• Enhance domestic capacity with additional low fares.
• Replace older leased aircraft to lower operational expenses.
• Support Qantas’ regional routes in Western Australia, particularly within the resources sector.

This redeployment is part of Qantas’ broader fleet modernization initiatives, which include the arrival of the Airbus A321XLR this month and the A350-1000ULR as part of Project Sunrise expected in 2026.

The anticipated financial impact from this closure is approximately $175 million, which encompasses redundancy and restructuring expenses, along with non-cash foreign currency losses. Around $160 million will incur as direct cash outlays, predominantly in FY26.

Nonetheless, Qantas expects to mitigate some of these costs through increased operating capital from the expanded Jetstar Airways functions and tax-related adjustments.

Updated Group Capacity and Outlook

According to the latest Qantas Group capacity forecast:

• Group Domestic growth is projected at +1% for FY25, increasing to +5% in the first quarter of FY26.
• Group International exhibits more robust growth at +12% in FY25.
• Jetstar International is set to lead international growth with a projected +25% growth in FY25 capacity.
• The overall group capacity is anticipated to rise by +8% in FY25, slightly easing to +5% in the first quarter of FY26.

Temporary challenges have included Cyclone Alfred’s impact on Queensland routes, reducing Group Domestic earnings by $30 million, as well as industrial actions affecting Qantas’ wet lease capacity with Finnair.

Despite Jetstar Asia’s closure, Singapore (SIN) continues to be Qantas Group’s third-largest international airport. The Group will maintain its interline and codeshare agreements with nearly 20 Asian airlines from this hub to ensure continued connectivity throughout the region.

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