Qantas to Shut Down Jetstar Asia in Singapore Amid Rising Costs and Intense Competition in the Region

Qantas will close its Singapore-based budget airline Jetstar Asia by July 2025 due to rising costs and strong competition, affecting 500 jobs.

Singapore (WE) — Qantas Airways (ASX: QAN) will shut down its Singapore-based budget airline, Jetstar Asia, after 20 years of operations. The group announced the decision on Wednesday, citing rising costs and intensifying regional competition. Jetstar Asia will cease operations on July 31, 2025.

As a result of the closure, around 500 employees will lose their jobs. A Qantas spokesperson confirmed the cuts and added that staff will receive severance packages and support with finding new roles. The airline attributed the closure to unsustainable financial pressure, particularly from supplier costs that have surged as much as 200%.

Moreover, Jetstar Asia’s fleet of 13 Airbus A320 aircraft will be redeployed to Australia and New Zealand. These planes will replace more expensive leased aircraft used by Jetstar Airways domestically. According to Qantas, this will free up nearly A$500 million in capital for reinvestment into its core markets.

In a statement, Vanessa Hudson, CEO of Qantas Group, explained, “Jetstar Asia’s cost base has fundamentally changed. Some of its supplier costs have jumped by 200%, making continued operations unviable.”

Notably, Jetstar Asia is forecasted to report an underlying loss of A$35 million (USD $22.76 million) before interest and tax for the financial year ending June 30. In comparison, other parts of the Qantas Group have delivered stronger financial returns, making it clear that the Singapore-based airline had become a weak link in the portfolio.

Jetstar Asia currently operates 16 routes across Asia out of Singapore’s Changi Airport, including popular destinations like Bangkok, Jakarta, and Manila. However, the airline has struggled to compete in a post-pandemic environment where other budget carriers have aggressively expanded.

For example, rivals like Scoot (a subsidiary of Singapore Airlines), Malaysia’s AirAsia, and Vietnam’s VietJet Aviation have restored their fleets and increased capacity, offering lower fares and more choices to travelers. Consequently, Jetstar Asia was unable to keep pace with its more agile competitors.

Furthermore, airport fees in Singapore have increased significantly in recent years. The Civil Aviation Authority of Singapore (CAAS) raised development and departure levies to fund Terminal 5, placing further financial stress on carriers like Jetstar Asia. This added pressure compounded the airline’s struggles in maintaining profitability.

Despite efforts to recover after the COVID-19 crisis, Jetstar Asia couldn’t regain financial traction. Although the airline resumed regional flights in 2022, it continued to face intense competition, higher costs, and decreased market share. Therefore, Qantas determined that keeping Jetstar Asia in operation was no longer feasible.

Jetstar Asia was originally launched in 2004 as a joint venture between Qantas and Westbrook Investments. Its purpose was to capitalize on the rapid growth in Asia’s low-cost travel market. For a time, it fulfilled that promise—flying millions of passengers across the region and expanding to over 25 destinations.

However, the airline never fully bounced back after the pandemic. While rivals capitalized on the recovery, Jetstar Asia’s margins shrank. Analysts point out that leaner operating models and national support helped other carriers grow faster. In contrast, Jetstar Asia operated under tighter financial conditions with increasing liabilities.

According to aviation analyst Brendan Sobie of Sobie Aviation, “Qantas made a tough but rational choice. Jetstar Asia had rising costs and falling demand. Meanwhile, competition across Asia kept growing stronger.”

In the months ahead, the airline will wind down its operations gradually. Affected customers will receive full refunds and will be rebooked on other airlines wherever possible. Qantas said it would ensure the transition is as smooth as possible, both for customers and employees.

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Although Jetstar Asia is closing, Qantas emphasized that its other budget carriers will continue operating. These include Jetstar Airways in Australia and Jetstar Japan. The group clarified that these operations remain profitable and are key to Qantas’ future strategy.

In fact, Qantas intends to strengthen its domestic and regional network. The redeployment of the 13 Airbus A320s will allow Jetstar Airways to retire older leased planes. In doing so, the airline expects to reduce operational costs and improve reliability.

Moreover, Qantas is investing heavily in fleet modernization. The company has placed large orders for Airbus A321XLR and A220 aircraft under its Project Sunrise and Project Winton programs. These initiatives are designed to boost both long-haul and domestic services in the years ahead.

While the closure of Jetstar Asia marks the end of a chapter, it also reflects a broader trend in the airline industry. Carriers are consolidating operations and focusing on profitability over scale. Therefore, other underperforming subsidiaries across the globe may face similar outcomes.

The departure of Jetstar Asia will also affect Singapore’s role as a hub for budget travel. Although the country remains a strategic location, rising costs could make it less attractive to budget operators in the future. Industry watchers believe the Changi Airport Group will need to adapt its fee structure and incentives to maintain competitiveness.

Meanwhile, other airlines are expected to move swiftly to fill the market gap left behind. Routes to cities like Ho Chi Minh, Bangkok, and Kuala Lumpur are popular and likely to attract interest from Scoot, AirAsia, and VietJet. This could eventually stabilize fare levels in the region, despite the loss of one carrier.

Although some see Jetstar Asia’s closure as a setback, Qantas insists it is a strategic pivot. By reallocating resources to better-performing regions, the airline believes it will emerge stronger and more efficient. This disciplined approach aligns with Qantas’ long-term goals of profitability and sustainability.

In conclusion, the airline will complete Jetstar Asia’s closure by the end of July. Until then, it will maintain reduced service, assist passengers with travel alternatives, and support staff through the transition. While this move ends a 20-year legacy, Qantas says it positions the group for future growth.

The global airline industry will watch closely. In an era defined by recovery, efficiency, and consolidation, Qantas’ exit from Singapore may be just the beginning of a larger reshaping of Asia’s budget travel landscape.