Singapore, June 12 - Australia’s Qantas Airways announced the closure of its Singapore-based budget airline, Jetstar Asia, on July 31, 2025, citing escalating supplier costs, high airport fees, and intense regional competition as the primary drivers of the decision. The move marks the end of a 20-year venture that struggled to maintain profitability in a fiercely competitive low-cost carrier market in Southeast Asia. Jetstar Asia, which operated 16 intra-Asia routes from Singapore’s Changi Airport, has faced mounting challenges in recent years, delivering returns far below those of Qantas’ stronger core markets. The airline is projected to post an underlying loss of A$35 million ($22.76 million) before interest and tax for the financial year ending June 30, 2025, having achieved profits in only six of its two decades of operation. The shutdown will result in up to 500 job losses in Singapore, with Qantas committing to provide redundancy benefits and support for affected employees to find new roles within the Qantas group or other airlines.
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Jetstar Asia’s closure is expected to release approximately A$500 million in capital, primarily from the value of its 13 Airbus A320 aircraft, which will be redeployed to Qantas’ operations in Australia and New Zealand. Six of these planes will replace leased aircraft in Jetstar Airways’ domestic operations, reducing costs, while four will replace aging aircraft used by Qantas to serve Australia’s mining industry. The remaining two aircraft will be allocated to Jetstar in Australia and one in New Zealand to expand capacity and potentially launch new routes, creating over 100 local jobs in these markets. The redeployment aligns with Qantas’ ambitious fleet renewal program, which includes nearly 200 firm aircraft orders and significant investments in existing planes, such as the upcoming delivery of the Airbus A321XLR and Project Sunrise A350-1000ULR.
The decision to shutter Jetstar Asia reflects the harsh economic realities of operating a low-cost carrier in Singapore. Jetstar Group CEO Stephanie Tully highlighted “really high cost increases” at the Singapore base, including double-digit rises in fuel, airport fees, ground handling, and security charges, with some supplier costs surging by up to 200% over the past 18 months to two years. Changi Airport, the world’s fourth-busiest by international passengers, is increasing charges through 2030 to fund infrastructure investments, adding further pressure. Additionally, the airport’s 2023 decision to relocate Jetstar Asia from Terminal 1 to Terminal 4, which lacks train connectivity to other terminals, disrupted passenger transfers and likely impacted the airline’s performance. Changi Airport expressed disappointment but pledged to work with other carriers to fill capacity gaps, particularly on four routes exclusively served by Jetstar Asia, which accounted for about 3% of the airport’s passenger traffic in 2024.
The competitive landscape in Southeast Asia has also intensified post-pandemic, with budget rivals like Singapore Airlines’ Scoot, Malaysia’s AirAsia, and Vietnam’s VietJet Aviation expanding capacity and driving airfares down. Unlike Jetstar Asia, which operated a modest fleet of 13 aircraft, these competitors have achieved greater scale, making it difficult for Jetstar Asia to remain cost-competitive. Qantas emphasized that the closure will not affect its other budget carriers, Jetstar Airways in Australia and Jetstar Japan, with the latter reported as profitable. Singapore remains a key hub for Qantas, supported by nearly 20 codeshare and interline partners. Jetstar Asia will gradually reduce its schedule over the next seven weeks, offering full refunds to passengers with bookings after July 31 and re-accommodating them on other airlines where possible. Qantas will incur a one-off financial hit of A$175 million over two financial years due to the closure, but anticipates stronger long-term returns by reallocating resources to its core markets.