In the latest development, Qantas Airways has indeed decided to shut down its budget airline Jetstar Asia headquartered at Singapore. The airline will shut down by the end of July. After over two decades of continuous service to the bi-state region, we came to this regrettable decision. The broader financial environment, exacerbated by increased supplier expenses, led us to make this decision.
Jetstar Asia, a subsidiary of Australian airline Qantas, has been under severe economic duress in recent years. Since then, the airline has struggled to turn a profit. Our projections indicate it will be handed another A$35 million loss for the composite financial year. Although Jetstar Asia is now in dire financial straits, the airline will continue to operate through the end of July. This provides travelers one final opportunity to experience its services and benefits.
Here’s what Vanessa Hudson, Qantas Group Chief Executive Officer, said about the challenges Jetstar Asia has faced. She noted, “We have seen some of Jetstar Asia’s supplier costs increase by up to 200 per cent, which has materially changed its cost base.” This catastrophic increase in operating expenses has brought the airline to a point where it can no longer maintain its business model.
The long-anticipated closure is a major change in the budget travel environment of Southeast Asia. Singapore-based Jetstar Asia has been a key player in this market space from the very beginning. The airline has succeeded year over year at providing an affordable and popular travel option to millions of passengers. This hard work has opened up air travel for the entire community.
Smartly, Qantas is doubling down on this decision. The airline intends to shift its attention back to its core operations while being solution-oriented to address the challenges posed by escalating costs in the aviation industry. The closure reflects a larger effort to cut costs and improve company-wide efficiency in an increasingly competitive landscape.