Qantas will close Jetstar Asia in $500m fleet shake up ahead of Virgin Australia’s IPO
June 11, 2025
Qantas will close loss-making subsidiary Jetstar Asia, with the carrier set to cease operations at the end of July, 2025.
The airline will scale back flights between now and then, with around 500 jobs in Singapore being lost as a result.
Redundancy packages and support for redeployment or placements with partner airlines will be offered.
Jetstar’s other operations, including Jetstar Airways (Australia) and Jetstar Japan will continue as usual.
Qantas says the move will enable the airline group to ‘recycle’ up to $500 million in capital, which will go to supporting its own fleet renewal programme.
“We are incredibly proud of the Jetstar Asia team and the work they have done to deliver low fares, strong operational performance and exceptional customer service,” commented Qantas Group CEO Vanessa Hudson. “This is a very tough day for them.”
Why is Jetstar Asia being closed?
Several factors have influenced Qantas’ decision to shutter Jetstar.
Rising operating costs have been cited as a major concern, as supplier costs spiked and Changi Airport’s fees rose steeply.
“Despite their best efforts, we have seen some of Jetstar Asia’s supplier costs increase by up to 200 per cent, which has materially changed its cost base,” explains Hudson.
Southeast Asia is one of the most competitive markets in the world, particularly in the low cost carrier segment. Fierce competition from the likes of Scoot, AirAsia and VietJet have pushed airfares down, making it hard for Jetstar Asia to compete.
Jetstar Asia’s financial performance has deteriorated in recent months, and is expected to post a loss of AU$25 million ($16 million) in the current half a year. Over the entire financial year, its losses are expected to come in at AU$35 million ($22.8 million)
Despite 20 years in operation, Jetstar Asia has only been profitable in six of those years.
Qantas will take a financial hit from the move, estimated at around AU$175 million ($114 million), which will be spread over the financial years 2025 and 2026.
What will happen to Jetstar Asia’s aircraft?
According to Qantas, the closure of Jetstar Asia’s 13 Airbus A320 family aircraft will be redeployed to core markets in Australia and New Zealand. This, it says, will support fleet renewal and create more than 100 local jobs.
According to Planespotters, Jetstar operates a fleet of A320-200s configured in an all-economy layout. They average 13.3 years, with the oldest approaching 14.7 years and the youngest airframe just 11 years.
Early indications are that nine aircraft will end up with Jetstar in Australia and New Zealand, while four will go to QantasLink in Western Australia to support regional connectivity.
Hudson called the move a ‘disciplined decision’ which would recycle capital across the business, prioritising investments to stronger performing segments.
Qantas is preparing to take delivery of its first Airbus A321XLR later this month, and the first of its Airbus A350-1000ULR for Project Sunrise flights in 2026.
Is Qantas closing Jetstar a strategic move ahead of Virgin Australia’s IPO?
Many analysts are viewing Qantas’ move as strategically timed to strengthen its market position just as Virgin Australia prepares for its IPO.
Cost cutting and fleet redeployment will sharpen Qantas’s competitive edge on domestic routes. Timing this right before Virgin relists on the ASX on 24 June is a smooth way to counter market gains made by Qantas’s rival.
Observers suggest the move could destabilise Virgin’s momentum at a time when it is hoping for a major cash injection to resume long haul flying.
Whatever the motive for the timing, the boost in liquidity and operational efficiency puts Qantas in a stronger position for the rest of the year.
