Qantas to Shut Down Jetstar Asia Amid Rising Costs and Fierce Competition

Qantas Airways announced it will shut down its Singapore-based budget airline Jetstar Asia by July 31, citing escalating supplier costs, high airport charges, and growing competition in the region. The closure will affect up to 500 jobs, and Jetstar Asia’s fleet of 13 Airbus A320s will be reassigned to operations in Australia and New Zealand.

The decision comes as low-cost rivals like Scoot (Singapore Airlines), AirAsia, and VietJet expand their post-pandemic capacities, intensifying price competition and pressuring margins. Jetstar Asia, which served 16 routes across Asia from Singapore’s Changi Airport, has struggled to match returns from Qantas’ core markets.

Qantas Group CEO Vanessa Hudson said some of Jetstar Asia’s supplier costs have surged by up to 200%, significantly impacting the airline’s cost structure. The carrier is projected to post an underlying EBIT loss of A$35 million (USD $22.76 million) for the financial year ending June 30.

The closure is expected to unlock up to A$500 million in value, which Qantas will reinvest in its core businesses, including replacing expensive leased aircraft currently used by Jetstar Airways in Australia. Affected customers will receive full refunds or be rebooked on other airlines. Employees will be offered redundancy packages and employment support, including opportunities within the Qantas group or with other carriers.

Operations at Qantas’ other low-cost subsidiaries—Jetstar Airways in Australia and Jetstar Japan—will continue unaffected. Jetstar Asia had operated in the region for 20 years but faced mounting operational and financial challenges in recent years, leading to this strategic retreat.

The move highlights the ongoing pressure on regional budget airlines as they navigate cost inflation and post-COVID market shifts.