The Australia-based Qantas Group has announced it will shut down its Singapore-based subsidiary Jetstar Asia next month.
The Australia-based Qantas Group has announced it will shut down its Singapore-based subsidiary Jetstar Asia next month.
In a statement, Qantas Group stated Jetstar Asia will continue to operate flights as its flight schedule is progressively reduced until its last flight on July 31. The closure will only impact Jetstar Asia and its 16 intra-Asia routes to/from its hub in Singapore. Flights operated by Jetstar Airways and Jetstar Japan within Asia and Australia are not affected.
The Qantas Group cited the impact of rising supplier costs, high airport fees, and competition within the region. According to Qantas Group CEO Vanessa Hudson, Jetstar Asia has seen some of its supplier costs increase by up to 200%.
Qantas will progressively redeploy Jetstar Asia's 13 A320s to Australia and New Zealand. The move will unlock up to AUD $500 million (~USD $324.95 million) in fleet capital to be recycled into the Group's core businesses and improve long-term returns.
With the closure of Jetstar Asia, it will result in one-off redundancy and restructuring costs as well as the non-cash expending of historical foreign currency translation losses from equity reserves and asset write-downs from consequential changes in the Group's fleet structure. Qantas expects the combined impact of the closure of Jetstar Asia to be worth approximately AUD $175 million (~USD $113.77 million) with approximately a third in FY2025 and the remainder across FY2026 which will be taken outside of underlying earnings.
“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,” Hudson said.
The airline group stated that it will provide assistance including refunds and accommodation for Jetstar Asia customers with existing bookings on cancelled flights. All affected Jetstar Asia employees will be provided redundancy benefits as well as employment support services, and job opportunities across the Group and with other regional airlines.
As it concludes its Singapore-based venture - first launched in 2003 - the Qantas Group states it will continue to remain committed to the city.
“Singapore remains a critical hub for the Qantas Group as its third largest international airport. Qantas also offers connections from Singapore through nearly 20 codeshare and interline partners to a variety of destinations across Asia.”
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