Jetstar Asia Fleet To Boost Qantas Group Carriers After Shutdown

The Qantas Group has announced it will close down its Singapore-based Jetstar Asia joint venture, allowing the group to move the LCC’s aircraft to the Australian market.

Qantas said Jetstar Asia will continue to operate flights for the next seven weeks, operating a “progressively reduced schedule” until its final day of service July 31. The carrier has a fleet of 13 Airbus A320s, covering a route network from Singapore to elsewhere in Asia.

The closure will cause the suspension of 16 intra-Asia routes, Qantas said. Services into Asia operated by Australia-based Jetstar Airways and Jetstar Japan will not be affected. Singapore will remain a “critical hub” for Qantas; it is the group’s third-largest overseas airport operation.

The Jetstar Asia aircraft will boost the Qantas Group’s operations in Australia and New Zealand in multiple ways. Some of the A320s will be used for capacity growth, some will replace leased narrowbodies, and others will be used for fleet renewal in the group’s regional operation in Western Australia.

Australia’s domestic demand is strong at the moment, and this part of its business has seen healthy profits. In contrast, Jetstar Asia has been struggling financially. The airline is expected to post an A$35 million ($23 million) underlying EBIT loss for the financial year ending June 30. The LCC’s financial performance deteriorated in its fiscal second half, Qantas said.

“Jetstar Asia has been impacted by rising supplier costs, high airport fees, and intensified competition in the region,” Qantas said. “This has fundamentally challenged [its] ability to deliver returns comparable to the stronger performing core markets in the Group.”

Some of Jetstar Asia’s supplier costs have increased by up to 200%, Qantas said.

Industry sources have highlighted increasingly high airport charges at Changi airport. Another factor was the airport shifting Jetstar Asia to Terminal 4 instead of Terminal 1 where Qantas operates, which disrupted passenger connectivity.

Qantas said it will provide redundancy benefits and employment support services to Jetstar Asia staff. The parent carrier is also “actively working to find job opportunities across the Group and with other airlines in the region.”

The closure of Jetstar Asia will leave Singapore Airlines subsidiary Scoot as the only LCC based in Singapore. Jetstar Asia accounted for 3.7% of the departing seats from Singapore for the week of June 9, which was the third-highest share behind Singapore Airlines and Scoot, according to data from CAPA and OAG.