The Closure of Jetstar Asia (3K)

Despite the challenges it has faced over the years, Jetstar Asia has operated within the highly competitive aviation market in Southeast Asia. From Singapore, the Qantas Group-backed Low Cost Carrier (LCC) has enhanced the Australian airline group's network in the region. However, just over two decades since its first flight took off, the Qantas Group recently announced its decision to shut down the budget carrier. The move has surprised many aviation industry observers, derailing the travel plans of affected customers, and thrown Jetstar Asia employees into uncertainty. With Singapore as a major hub in Southeast Asia, there is no question this airline closure will impact the aviation industry in the region.

Jetstar Asia Closure

On June 11, 2025, the Qantas Group officially announced its decision to close Jetstar Asia. According to the Australian airline group, the decision was made along with its majority shareholder – Westbrook Investments – to close the Singapore-based budget carrier. The decision will affect all Jetstar Asia operated flights with the “3K” flight code to/from Singapore along with a Fifth Freedom route between Manila and Osaka-Kansai, and its current operations will progressively reduced until its last flight on July 31. The operations at Singapore, and other parts of Asia operated by the two other Jetstar carriers – Jetstar Japan (GK) and Jetstar (JQ) – are not affected.

The announcement came to a surprise to many, especially to the airline's 500 employees and passengers. Jetstar Asia has stated it will provide assistance including refunds and accommodation for its 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 other regional airlines. Though for the airline group, it was a decision knowing the challenges it has faced over the years.

Qantas described the move to close Jetstar Asia as a “strategic restructure” as the airline cited challenges such as rising supplier costs, high airport fees, and competition in the region. According to Qantas Group CEO Vanessa Hudson, Jetstar Asia has seen some of its supplier costs increase by up to 200%. Prior to the closure, the budget carrier is expected to post an underlying EBIT loss of around AUD $35 million (~USD $22.8 milion) during this financial year (FY2024-2025).

In a statement, Hudson said: “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 will end the operation of the budget airline which was first launched in 2004. Founded as a joint venture between Qantas and several Singapore-based businessmen and companies. Among the backers of Jetstar Asia was Singapore's government investment firm Temasek Holdings, which exited the venture in 2009. Throughout its history, it has played catch-up to other established players such as AirAsia and Tiger Airways which would later become part of Singapore Airlines' budget subsidiary Scoot. Though in 2005, it did boost its position taking on Singapore's first LCC – Valuair – through merger.

Today, Jetstar Asia operates a fleet of 13 narrowbody Airbus A320 aircraft to 16 destinations mostly within Southeast Asia. Among the destinations outside the region include Wuxi, China; Osaka, Japan (via Manila); and Colombo, Sri Lanka. While providing low fares for travel within the region, it also served to provide connections via Singapore to other nearby cities such as Denpasar (Bali), Medan, Phuket, Krabi, and Jakarta for travelers on flights operated by other Jetstar carriers and Qantas. Facing losses and being in a highly competitive hub of Singapore, the Qantas Group has made the business decision to close its Singapore-based budget carrier venture.

Qantas Group Restructuring

By closing Jetstar Asia, Qantas will conclude its Singapore-based venture which is one of three ventures formed outside of Australia. It was part of Qantas' ambitious plans in the early 2000s to capitalize on the emerging markets Asia through budget carrier ventures in Vietnam with Jetstar Pacific, and also in Japan with Jetstar Japan. The airline group also had plans to launch a Hong Kong-based venture – Jetstar Hong Kong – which eventually fell through. Qantas exited from Jetstar Pacific in 2020, so with the closure of Jetstar Asia, Jetstar Japan now remains the group's lone, non-Australia-based  venture still operating.  

 As it announced the closure of Jetstar Asia, Qantas stated the reasons for the decision including the rising supplier costs, high airport fees, and regional competition. One particular statement stood out saying the reasons cited “has fundamentally challenged the low-cost airline’s ability to deliver returns comparable to the stronger performing core markets in the Group.” Being an Australian airline, Qantas is refocusing the resources that would be allocated to Jetstar Asia back to its operations in Australia and its neighbor across the Tasman Sea: New Zealand.

While estimating the financial impact of the closure of Jetstar Asia to be worth around AUD $175 million (~USD $114.2 million) over the course of the FY 2025 and FY 2026, Qantas also stated the move will “unlock” up to AUD $500 million (~USD $326.25 million) in fleet capital into the Qantas Group's core businesses and improve long-term returns. Jetstar Asia's 13 A320s will be redeployed to the group's core markets in Australia and New Zealand. Some of the aircraft will replace leased aircraft in Jetstar Airway's domestic operation, and also help accelerate the airline's ongoing fleet renewal program. Qantas identified the soon-to-be former Jetstar Asia aircraft will help in regional operations especially in Western Australia.  

Qantas Group's Presence in Singapore and Southeast Asia

Despite losing its locally-based venture in Singapore, the Qantas Group will continue to remain represented well in the city and Southeast Asia. While reallocating resources to better serve the Australian and New Zealand markets, the airline group is removing redundancies within its network especially to/from Singapore. In addition, Qantas and Jetstar has been boosting its presence in Southeast Asia especially with direct flights between Australia and the region.

Singapore is a highly competitive aviation market, with a great mix of airlines that have also uses Changi Airport as its own connecting hub. For Qantas, it has been an important hub in its history especially serving as a stop on its “Kangaroo Route” between Sydney and London. Today, Qantas operates five routes from Australia – Brisbane, Darwin, Melbourne, Sydney, and Perth. The airline also continues the tradition of operating the “Kangaroo Route” via Singapore to London Heathrow. Supporting Jetstar Asia and Qantas in Singapore is Jetstar's (JQ) services to the city from Melbourne and Perth, as well as its own Fifth-Freedom route to Denpasar (Bali).

With the closure of Jetstar Asia, Qantas removes some redundancies in its network in Southeast Asia. An example of this is at Denpasar where both Jetstar Asia and Jetstar operates flights between Singapore and the popular Indonesian resort destination.  Qantas through Jetstar has been boosting its flights to Denpasar where customers can travel with the budget carrier to Bali from six cities in Australia – Adelaide, Cairns, Darwin, Melbourne, Perth, and Sydney. Qantas also operates flights to Bali from Melbourne and Sydney. Its presence in Denpasar will be increased further with new routes by Jetstar from Gold Coast and Newcastle.

Other Jetstar Asia destinations that will continue to be served by Qantas Group carriers include: Bangkok (Qantas: Sydney/Jetstar: Brisbane, Melbourne, and Perth), Jakarta (Qantas: Melbourne and Sydney), and Phuket (Jetstar: Melbourne, Perth, Sydney), In the Philippines, Qantas operates flights to Manila from Brisbane and Sydney. The airline group is expected to boost its services to the Philippines with a new Jetstar-operated route to Manila from Perth, and a new route between Brisbane and Cebu – which will be the first direct air link to the central Philippine city from Australia.

Singapore's Connectivity Remains Strong

For Singapore and Changi Airport, there likely will not be a need for a new budget airline to fill the void left by Jetstar Asia. The city state's main airline group – Singapore Airlines Group (SIA) - fully supports its budget subsidiary Scoot which can pick up the slack of routes that Jetstar Asia will relinquish such as to Wuxi, Naha, and Colombo. Other regional-based carriers already with a strong presence in Singapore – especially the big budget airline groups such as AirAsia, Lion Air, and Vietjet – can add to their services from their Vietnam, Indonesia, Malaysia, Thailand, and Philippines based subsidiaries.  

A closure of an airline – big or small – always has consequences whether good or bad. While it impacts passengers and their employees, ultimately it is a tough business decision to be made at times. This was very tough move for Qantas to make as Singapore has been a historically significant hub for the airline. It was an opportunity to provide budget flights in one of Southeast Asia's most powerful cities and countries. However, its current situation in Singapore no longer warrants having a locally-based airline venture. Now other airlines – including Qantas and Jetstar – will help fill the void left by the closure of Jetstar Asia. 

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