SINGAPORE: The Qantas Group announced on Wednesday (June 11) that it will be closing its Singapore-based low-cost subsidiary, Jetstar Asia, due to financial reasons. Reports say that more than 500 employees will be affected by the closure.
Over the next seven weeks, the company will keep operating flights, albeit on a progressively reduced schedule. Jetstar Asia’s final day of operation will be on July 31. Full refunds will be offered to customers with existing bookings on cancelled flights, with the company re-accommodating customers onto other airlines where possible.
The company said in its announcement that Jetstar Asia has faced increasing challenges in the past few years, including higher supplier costs and airport fees, as well as increased regional competition, which “fundamentally challenged the low-cost airline’s ability to deliver returns comparable to the stronger performing core markets in the Group.”
Calling the move a strategic restructure, the Quantas Group added that it will be enabled to recycle as much as $500 million in capital, which will go toward supporting its fleet renewal program.
“The airline is expected to post a $35 million underlying EBIT loss this financial year, prior to the closure decision,” the statement reads.
Only the intra-Asia routes operated by Jetstar from its Singapore base will be affected by the move, and Jetstar Airways will continue to fly from Australia into Asia, including Singapore, Thailand, Indonesia, Vietnam, Japan, and South Korea.
Qantas Group CEO Vanessa Hudson said: “Jetstar Asia has been a pioneering force in the Asian aviation market for more than 20 years, making air travel accessible to millions of customers across Southeast Asia.”
Jetstar Asia’s affected workers
The company added that its employees affected by the closure will be given employment support services and redundancy benefits.
A spokesperson for the company was quoted by CNA as saying that the affected staff will be getting four weeks’ salary for each year they were employed by Jetstar Asia. Additionally, they’ll receive a special bonus payment for the financial year of 2025 and a special thank-you payment. Travel benefits for a period equivalent to their tenure will also be made available to them.
“Qantas is also actively working to find job opportunities across the Group and with other airlines in the region,” the company’s statement read.
The Qantas Group underlined the importance of Singapore as a critical hub, since Changi is its third-largest airport across the globe.
“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. This is a very tough day for them. 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,” said Qantas Group CEO Vanessa Hudson.
“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 added. /TISG
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