Qantas has announced it will shut down Jetstar Asia, its budget airline based in Singapore, citing rising operational costs and intense competition in the region.
Jetstar Asia will officially cease operations on July 31, ending more than 20 years of service. Until then, it will operate on a gradually reduced schedule, Qantas said in a statement on Wednesday.
“Despite Jetstar Asia’s strong performance in customer service and reliability, increasing supplier costs, high airport charges, and stiff competition have made the business unsustainable,” Qantas stated.
Jetstar Asia currently operates 16 routes from Singapore to destinations across Malaysia, Thailand, Indonesia, Japan, China, the Philippines, Sri Lanka, and Australia.
The closure will not impact Jetstar services in Australia, New Zealand, or Japan.
Customers with affected bookings will be fully refunded, and Qantas will seek to rebook them with other airlines where possible.
More than 500 jobs in Singapore will be lost as a result of the shutdown. Qantas says affected employees will receive severance packages and job placement support, including potential roles within Qantas or other airlines.
As part of the exit, Jetstar Asia’s fleet of 13 Airbus A320s will be gradually redeployed to Qantas operations in Australia and New Zealand.
Aviation law expert Prof. Alan Tan from the National University of Singapore said the move marks a major loss for Southeast Asian travelers, calling the region’s low-cost carrier landscape “brutally competitive.”
Virgin Australia Eyes Stock Market Debut
On the same day, Virgin Australia revealed plans to go public on the Australian Stock Exchange on June 24, pricing its shares at A$2.90. The IPO is expected to raise A$685 million, valuing the airline at A$2.3 billion.
The listing will allow key investors—including Bain Capital, Qatar Airways Group, and the Virgin Group—to partially cash out their stakes, while new investors are projected to hold around 30% of shares.
Virgin Australia, which flies 20 million passengers annually across 76 aircraft, operates both domestic and short-haul international routes. It will soon launch long-haul services to Doha through a partnership with Qatar Airways, which owns 25% of the airline.
Criticism of Budget Airlines Model
Meanwhile, United Airlines CEO Scott Kirby recently criticized the low-cost airline model, saying it was based on tricking customers with hidden fees.
Speaking at the “Future of Everything” summit, Kirby said, “The model was: screw the customer… then charge them a bunch of fees they weren’t expecting.” He suggested budget carriers struggle because they don’t generate loyalty.
Ironically, United announced a partnership with JetBlue—often considered a budget airline—on the same day.
