Australia's Qantas said on Wednesday (Jun 11) it will close Jetstar Asia, the group's Singapore-based budget airline, as it reels with rising supplier costs, higher airport fees and intensifying competition among low-cost carriers.
The airline will cease operating on Jul 31 and will continue flights for the next seven weeks.
It added that Jetstar Asia customers with existing bookings on cancelled flights will be offered full refunds, and the Qantas Group will look to reaccommodate customers onto other airlines where possible.
Employees will also be provided redundancy benefits as well as employment support services, while Qantas works to find job opportunities across the group and with other airlines in the region.
Jetstar Asia continues to be negatively affected by rising supplier costs, high fees at airports and rising competition in the region, fundamentally challenging its ability to deliver returns comparable to the stronger performing core markets in the group.
Group CEO Vanessa Hudson said the company has seen some supplier costs rise by up to 200 per cent, materially changing its cost base.
"I want to sincerely thank and acknowledge our incredible Jetstar Asia team who should be very proud of the impact they have had on aviation in the region over the past two decades," she said.
"We are currently undertaking the most ambitious fleet renewal program in our history, with almost 200 firm aircraft orders and hundreds of millions of dollars being invested into our existing fleet," Hudson added.
Qantas launched the airline over two decades ago in a bid to capitalize on the growing demand for low-cost air travel in Asia. It said that 16 intra-Asia routes will be affected by Jetstar Asia's closure.
Jetstar Airways’ domestic and international operations in Australia and New Zealand and Jetstar Japan will not be affected.
The closure of Jetstar Asia will free A$500 million (US$326.40 million) in capital for the flag carrier to invest in its fleet renewal plans.
Qantas said that 13 Jetstar Asia Airbus A320 aircraft will be progressively redirected to Australia and New Zealand.
The low-cost unit has faced intensifying competition from Southeast Asian budget carriers, including Capital A's AirAsia and Singapore Airlines' Scoot.
It had previously acquired Impulse Airlines and operated it under the QantasLink brand, but following the decision to launch a low-cost carrier, it re-launched the airline under the Jetstar brand.
Jetstar Asia is currently expected to post an underlying EBIT loss of A$35 million in the current financial year.
Continue reading...
The airline will cease operating on Jul 31 and will continue flights for the next seven weeks.
It added that Jetstar Asia customers with existing bookings on cancelled flights will be offered full refunds, and the Qantas Group will look to reaccommodate customers onto other airlines where possible.
Employees will also be provided redundancy benefits as well as employment support services, while Qantas works to find job opportunities across the group and with other airlines in the region.
Jetstar Asia continues to be negatively affected by rising supplier costs, high fees at airports and rising competition in the region, fundamentally challenging its ability to deliver returns comparable to the stronger performing core markets in the group.
Group CEO Vanessa Hudson said the company has seen some supplier costs rise by up to 200 per cent, materially changing its cost base.
"I want to sincerely thank and acknowledge our incredible Jetstar Asia team who should be very proud of the impact they have had on aviation in the region over the past two decades," she said.
"We are currently undertaking the most ambitious fleet renewal program in our history, with almost 200 firm aircraft orders and hundreds of millions of dollars being invested into our existing fleet," Hudson added.
Qantas launched the airline over two decades ago in a bid to capitalize on the growing demand for low-cost air travel in Asia. It said that 16 intra-Asia routes will be affected by Jetstar Asia's closure.
Jetstar Airways’ domestic and international operations in Australia and New Zealand and Jetstar Japan will not be affected.
The closure of Jetstar Asia will free A$500 million (US$326.40 million) in capital for the flag carrier to invest in its fleet renewal plans.
Qantas said that 13 Jetstar Asia Airbus A320 aircraft will be progressively redirected to Australia and New Zealand.
The low-cost unit has faced intensifying competition from Southeast Asian budget carriers, including Capital A's AirAsia and Singapore Airlines' Scoot.
It had previously acquired Impulse Airlines and operated it under the QantasLink brand, but following the decision to launch a low-cost carrier, it re-launched the airline under the Jetstar brand.
Jetstar Asia is currently expected to post an underlying EBIT loss of A$35 million in the current financial year.
Continue reading...