The Qantas Group has officially announced its low-cost subsidiary, Jetstar Asia, will close at the end of July.
Qantas Group shared that the airline is expected to post a $35 million underlying EBIT loss this financial year but will help the group to unlock up to $500 million in capital. The decision came down to rising supplier costs, high airport fees, and intensified competition in the region.
As they prepare for closure, the airline will wind down over the next seven weeks operating a reduced schedule.
Speaking on the news, 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. 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.”
The capital that is unlocked will be “recycled into the Group’s core businesses and improve long-term returns.” This comes as the group embarks on the most ambitious fleet renewal in its history.
Despite cutting Jetstar Asia, Jetstar Airways will continue serving domestic and international operations in Australia and New Zealand or Jetstar Japan. Jetstar Airways will also continue to fly from Australia into Asia including to all its popular destinations across Singapore, Thailand, Indonesia, Vietnam, Japan and South Korea.
For more like this see:
- How can LCCs lead the industry in tech adoption and experience strategies while keeping fares low?
- Qantas’ new distribution model: What will change?
- Qantas extends its loyalty offering through partnership with Bangkok Airways
