SINGAPORE – Jetstar Asia, a budget airline based in Singapore, will cease operations on July 31, 2024, impacting more than 500 employees. The airline’s closure follows mounting pressures from rising supplier costs, elevated airport fees, and intensified competition in the low-cost travel sector.
Financial Constraints and Strategic Divestment
Qantas Airways, which partially owns Jetstar Asia, announced that the shut down would free up approximately A$500 million (USD 325.9 million; GBP 241.4 million) for reinvestment into renewing its aircraft fleet. Qantas will redeploy 13 aircraft from Jetstar Asia to bolster its operational capacity for routes encompassing Australia and New Zealand.
“We have seen some of Jetstar Asia’s supplier costs increase by up to 200%, which has materially changed its cost base,” said Qantas Group Chief Executive Vanessa Hudson in an official statement. The airline has reported an estimated loss of A$35 million for the current financial year and has been operational for over 20 years, offering flights to various destinations in Asia including Malaysia, the Philippines, and Japan.
Operational Adjustments and Passenger Services
Despite the impending closure, Jetstar Asia’s flights will continue for another seven weeks, though the airline expects to progressively reduce its service schedule leading up to the shutdown. Passengers holding tickets for affected routes will be afforded full refunds, with some travelers being potentially rerouted onto flights operated by Qantas.
In light of Wednesday’s announcement, all employees will receive redundancy benefits. “We have an exceptional team who provide world-leading customer service and best-in-class operational performance. Our focus is on supporting them through this process and helping them to find new roles in the industry,” said Jetstar Group Chief Executive Stephanie Tully.
Continuing Low-Cost Travel Opportunities
The closure of Jetstar Asia will not disrupt the operations of Jetstar Airways, based in Australia, or Jetstar Japan, as confirmed by Qantas. The Australian national carrier maintains a commitment to provide low-cost alternatives to Asia through Jetstar Airways, servicing destinations such as Thailand, Indonesia, and Japan.
Originally established in 2004 as part of Qantas’s strategy to penetrate the expanding low-cost travel segment in Asia, Jetstar Asia has faced challenges from competitors like AirAsia and Scoot. This latest development underscores the ongoing volatility within the budget airline market as airlines navigate economic pressures and changing consumer behaviors in the post-pandemic landscape.
Für mehr business News, check PGN Business Insider.
