Qantas to Close Jetstar Asia, Cancels 16 Routes from Singapore

SYDNEY- Qantas Group (QF) has made a significant announcement regarding the closure of its Singapore-based low-cost airline subsidiary, Jetstar Asia (3K), with the shutdown scheduled for July 31, 2025. This strategic decision is part of the Group’s broader initiative to renew its fleet and optimize capital allocation.

The cessation of operations will impact 16 intra-Asia routes originating from Singapore Changi Airport (SIN), but it will not affect the operations of Jetstar Airways (JQ) or Jetstar Japan (GK) in or out of Asia.

Jetstar Asia, which has been an integral part of Southeast Asia’s budget travel landscape for over 20 years, is shutting down due to soaring supplier costs, which have increased by as much as 200%, alongside rising competition in the region.

Despite a history of reliable service, the airline struggled to match the profitability levels of Qantas Group’s central operations in Australia and New Zealand.

The airline is projected to incur a loss of $35 million in underlying EBIT for FY25. Operations will be phased out over a period of seven weeks, culminating on July 31, 2025.

Customers affected by these changes will have the option for full refunds or the possibility of rebooking on alternative carriers, while employees will receive redundancy support and job placement assistance within the Qantas Group or with other regional airlines.

Redeployment of Resources

This closure will allow the Qantas Group to redeploy up to $500 million in capital. Thirteen Airbus A320 aircraft from Jetstar Asia will be redirected to support Jetstar Airways and QantasLink operations throughout Australia and New Zealand. The redeployment efforts aim to:

• Boost domestic capacity by providing more low-fare options.
• Replace older leased aircraft to diminish operational expenses.
• Support Qantas’ regional routes in Western Australia, particularly in resource-rich areas.

This redeployment strategy is consistent with Qantas’ comprehensive fleet modernization initiatives, which currently include the arrival of the Airbus A321XLR this month and the planned addition of the A350-1000ULR under Project Sunrise in 2026.

The overall anticipated financial impact resulting from this closure is estimated at approximately $175 million, which includes redundancy and restructuring costs, as well as non-cash foreign currency translation losses. Around $160 million of this will be direct cash expenses, primarily incurred in FY26.

Nonetheless, Qantas expects to partially offset these costs through enhanced working capital derived from expanded Jetstar Airways operations and tax-related adjustments.

Updated Group Capacity and Outlook

In line with the latest capacity guidance from Qantas Group:

• Group Domestic growth is projected to be modest at +1% for FY25, with an increase to +5% in 1Q26.
• Group International indicates a robust expansion, showing an increase of +12% in FY25.
• Jetstar International is set to lead the international growth with an anticipated +25% increase in capacity for FY25.
• The overall group capacity is slated to grow by +8% in FY25, easing slightly to +5% in 1Q26.

Temporary challenges have arisen, including Cyclone Alfred, which affected routes in Queensland and reduced Group Domestic earnings by $30 million, along with industrial actions impacting Qantas’ operational capacity in connection with its Finnair wet lease.

Despite the closure of Jetstar Asia, Singapore (SIN) remains a crucial hub for Qantas Group, being its third-largest international airport. Qantas intends to continue utilizing interline and codeshare arrangements with nearly 20 Asian airlines to maintain connectivity throughout the region.

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