Qantas closes Jetstar Asia, 500 jobs to go after financial losses

Qantas will shutter loss-making Singapore-based Jetstar Asia by the end of July, and bring the airline’s 13 jets down under.

Qantas will axe its loss-making Jetstar Asia operation at the end of next month in a move that will deliver valuable extra aircraft to the Australian market at the expense of 500 Singapore-based jobs.

Qantas announced a surprise restructure which would unlock $500m in capital to support the group’s fleet renewal plan and redirect 13 A320s to Jetstar and West Australia FIFO operator Network Aviation.

Jetstar CEO Stephanie Tully revealed Jetstar Asia had turned a profit in only six of its 20 years of operation, and was on track for a $35m loss in the 2025 financial year.

At the root of the problem was increased costs across the supply chain in Singapore, from where Jetstar Asia operated 16 routes, including to Broome in Australia.

“What we’ve seen across the whole ecosystem in Singapore is cost increases of up to 200 per cent of CPI, in our fuel supply, airport fees, ground handling and security charges,” said Ms Tully.

“Obviously fundamental to the Jetstar model is that we are delivering low fares, and when you have a cost ecosystem around you at Changi Singapore, it makes it unsustainable to deliver that business model.”

She said other airlines in the Jetstar family, in Japan, New Zealand and Australia, were profitable.

Qantas CEO Vanessa Hudson recognised it was a tough time for the employees of Jetstar Asia, who would receive redundancy benefits and employment support services, as well as the chance of redeployment elsewhere in the group.

But Ms Hudson said the half a billion dollars worth of capital unlocked represented a “really important part of our financial framework”.

“We are currently undertaking the most ambitious fleet renewal program in our history with almost 200 firm aircraft orders and hundreds of millions of dollars being invested into our existing fleet,” she said.

“We’re making disciplined decisions which recycle capital across our business and prioritise it to stronger performing segments as well as strategic growth initiatives like Project Sunrise.”

As Qantas awaits the delivery of new aircraft, Jetstar Asia’s fleet would help boost capacity across the group’s Australia and New Zealand operations and create more than 100 more jobs.

Four A320s were earmarked for Network Aviation in WA to replace ageing Fokker 100s, with the remaining nine to go to Jetstar including six as lease replacements.

Given 11 of the 13 Jetstar Asia aircraft were owned by Qantas, substituting six of those for more expensive leased aircraft would help Jetstar improve earnings and lower costs, Ms Hudson said.

“Only three aircraft are going to be used to serve growth for Jetstar, with two predominantly in Australia and one will go to New Zealand,” she said.

Qantas Group CEO Vanessa Hudson in the new Qantas A321XLR due to arrive next month.

Ms Tully said in the first instance, the extra aircraft would be deployed on existing routes both domestic and international but did not rule out further network expansion.

“We have ideas for new routes, so we will look to do that and stimulate demand,” she added.

Jetstar Asia’s closure would result in one-off redundancy and restructuring costs of an estimated $175m, with approximately a third in the current financial year, and the rest across the 2026 financial year.

Qantas also revealed disruption from Cyclone Alfred in March had delivered a $30m blow to earnings as a result of lower than expected domestic capacity growth, and industrial action at wet lease partner Finnair had shrunk group international capacity by 3 per cent.

Demand remained strong however, and revenue and capital expenditure were in line with previous guidance.

Capacity was on track for growth in the first quarter of the 2026 financial year, which Ms Hudson said would match the demand they were seeing coming through.

“The second half of the calendar year we’ve got some very good events — the Lions tour, good school holiday alignment, and we’ve also got the Ashes, so we’re expecting the first half of FY26 to be strong,” she said.

Qantas shares closed down 1.3 per cent on the back of the Jetstar Asia announcement, at $10.50.

Originally published as Qantas closes Jetstar Asia, 500 jobs to go after financial losses