The Qantas Group has unveiled a strategic overhaul to strengthen its core operations in Australia and New Zealand while supporting its ambitious fleet renewal program.
This restructuring includes the closure of Jetstar Asia, its Singapore-based low-cost subsidiary, to unlock up to $500 million in capital.
The move aims to enhance financial returns, create local jobs, and expand low-fare offerings in stronger markets.
Jetstar Asia Closure
Jetstar Asia, a key player in the Asian aviation market for over two decades, will cease operations on July 31, 2025.
The airline, majority-owned by Westbrook Investments, has faced mounting challenges. These have included rising supplier costs, high airport fees, and intense regional competition.
These pressures have eroded its ability to deliver returns comparable to Qantas’ core markets in Australia and New Zealand.
the subsidiary airline holds a strong track record of customer service and operational reliability. However, Jetstar Asia is projected to post a $35 million underlying EBIT loss for the current financial year.
Over the next seven weeks, the airline will operate a reduced schedule to ensure a smooth wind-down.
The closure affects only the 16 intra-Asia routes operated from Singapore. This leaves Jetstar Airways’ domestic and international services in Australia and New Zealand, as well as Jetstar Japan, unaffected.
Popular routes from Australia to destinations like Singapore, Thailand, Indonesia, Vietnam, Japan, and South Korea will continue as normal.
Qantas Group CEO Vanessa Hudson expressed pride in Jetstar Asia’s legacy. “Jetstar Asia has been a trailblazer in making air travel affordable for millions across Southeast Asia. We’re incredibly proud of our team’s dedication to low fares and exceptional service.”
“However, supplier costs have surged by up to 200%, fundamentally altering the airline’s cost base. This is a difficult day for our team, and we sincerely thank them for their impact on the region’s aviation industry.”
Support for Customers and Employees
Jetstar Asia customers with bookings on canceled flights will receive full refunds. Qantas is working to reaccommodate travelers on other airlines where possible.
Affected employees will receive redundancy benefits and employment support services. Qantas is also exploring job opportunities for these employees within the Group and with other regional airlines.
Singapore remains a vital hub for Qantas, its third-largest international airport, with nearly 20 codeshare and interline partners offering connections across Asia.
Redistributing Capital for Growth and Fleet Renewal
The closure of Jetstar Asia will free up to $500 million in capital, which Qantas will redirect to its core businesses in Australia and New Zealand.
This aligns with the Group’s Financial Framework, which emphasizes disciplined capital allocation to maximize returns. A key component of this strategy involves redeploying Jetstar Asia’s 13 mid-life Airbus A320 aircraft to Australia and New Zealand.
These aircraft will support fleet renewal, replace leased planes in Jetstar Airways’ domestic operations, and bolster Qantas’ regional services in Western Australia’s resources sector. This redeployment is expected to create over 100 local jobs and expand low-fare options for customers.
Fleet Renewal program
The Qantas Group is undertaking its most extensive fleet renewal program to date, with nearly 200 firm aircraft orders. The first Airbus A321XLR will arrive this month, followed by the Project Sunrise A350-1000ULR in 2026, designed for ultra-long-haul flights.
“We’re making strategic decisions to recycle capital into high-performing segments and growth initiatives like Project Sunrise,” Hudson said. “This ensures we continue delivering value to our customers and shareholders.”
Financial Implications of the Closure
The closure of Jetstar Asia will incur one-off costs of approximately $175 million, including redundancy payments, restructuring expenses, and non-cash charges from foreign currency translation losses and asset write-downs.
About one-third of these costs will hit in FY25, with the remainder in FY26, excluded from underlying earnings.
The direct pre-tax cash impact, estimated at $160 million, will primarily occur in FY26 but will be offset by working capital benefits from Jetstar Airways’ growth and tax adjustments in FY26 and beyond.
Group Financial Update for Second Half of 2025
Jetstar Asia’s performance weakened in the second half, with an expected underlying EBIT loss of $25 million.
Group Domestic capacity growth has been revised downward due to disruptions from Cyclone Alfred in Queensland, which will reduce earnings by $30 million.
Group International capacity growth is now projected at 9%, down 3% from prior guidance due to industrial action affecting Qantas’ Finnair wet lease.
However, demand remains robust across domestic and international markets, with unit revenue and capital expenditure aligning with previous forecasts.
Looking Ahead
The Qantas Group’s strategic restructure reflects a commitment to adaptability in a competitive industry. By closing Jetstar Asia, Qantas is prioritizing long-term financial health and growth in its core markets.
The redeployment of aircraft and capital will enhance operational efficiency, create jobs, and expand affordable travel options in Australia and New Zealand.
As Qantas embarks on its fleet renewal journey, including the introduction of cutting-edge aircraft, it remains focused on delivering value to customers and stakeholders while navigating economic and operational challenges.
This bold move underscores Qantas’ resilience and forward-thinking approach, ensuring it remains a leader in the global aviation industry.
With Singapore still a critical hub and a strong network of partners, Qantas is well-positioned to maintain its presence in Asia while strengthening its foundation at home.
