Australia’s Qantas to close Jetstar Asia amid stiff competition, rising costs
The move will free US$326.40 million in capital for the company to invest in its fleet renewal plans
The shutdown of the 20-year-old airline next month will result in up to 500 job losses, a Qantas spokesperson said, and Jetstar Asia’s fleet of 13 Airbus A320 planes will be redeployed to Australia and New Zealand.
Cost increases have been seen across “the whole ecosystem we operate out of”, Jetstar group CEO Stephanie Tully told reporters at a briefing on Wednesday. “The airport fees are a part of that. That has had an impact on the business.”
Jetstar Asia will stop operating on July 31, enabling Qantas to free up as much as A$500 million (US$327 million) in capital to fund the group’s fleet renewal programme, Qantas said in a statement earlier on Wednesday. Thirteen Jetstar Asia Airbus SE A320 aircraft will be redeployed to Australia and New Zealand, creating 100 jobs locally.
Qantas CEO Vanessa Hudson is prioritising the group’s cash cow, the Australian domestic network, as she juggles assets to pay for the biggest plane order in the airline’s history. Qantas has firm orders for almost 200 new aircraft.
Jetstar Asia, which is 49 per cent owned by Qantas, is expected to post an underlying operating loss of A$35 million this financial year in the face of intensifying competition and rising costs, Qantas’s statement said. The closure will result in a one-off impact of A$175 million.
