Budget airline Jetstar Asia will cease operations at the end of July, with all affected passengers to receive full refunds, the carrier announced Wednesday.
The low-cost airline, based in Singapore, has faced increasing financial strain due to rising supplier costs, some up by as much as 200%, along with soaring airport charges and intensified competition in the region. The shutdown will result in more than 500 job losses.
The closure will not affect the operations of Australia-based Jetstar Airways or Jetstar Japan, according to part-owner Qantas. Jetstar Asia is 51% owned by Singapore firm Westbrook Investments, with Qantas holding the remaining stake.
The airline will progressively reduce its services over the next seven weeks. Customers with bookings affected by the schedule changes will be notified.
Those set to fly after the final day of operation on 31 July will be contacted directly by the airline.
Some passengers may be rebooked on alternate flights operated by the Qantas Group. Travellers who booked through travel agents or other airlines are advised to contact those providers for assistance.
Sixteen routes across Asia will be affected, including services from Singapore to destinations in Malaysia, Indonesia, and the Philippines.
Jetstar Asia’s shutdown is expected to free up A$500 million (US$325.9 million; £241.4 million) for Qantas, which will be used to renew its fleet and redeploy 13 aircraft across domestic routes in Australia and New Zealand.
“We have seen some of Jetstar Asia’s supplier costs increase by up to 200%, which has materially changed its cost base,” said Qantas Group CEO Vanessa Hudson in a statement.
Founded in 2004, Jetstar Asia has operated for over two decades but is projected to post a loss of A$35 million this financial year.
The announcement has prompted an emotional response from former customers.
One Facebook user commented that they were “very saddened to hear this news about a very warm, efficient, wonderful airline,” while another thanked Jetstar Asia for “opening up and popularising the budget travel market.”
All affected employees will be provided with redundancy packages.
“We have an exceptional team who provide world leading customer service and best in class operational performance and our focus is on supporting them through this process and helping them to find new roles in the industry,” said Jetstar Group CEO Stephanie Tully.
Despite Jetstar Asia’s exit, Qantas will continue offering low-cost flights to the region through Jetstar Airways, which services destinations in Thailand, Indonesia, Japan, and more.
Jetstar Asia was originally launched to tap into Asia’s growing demand for budget air travel, but it has faced strong competition from regional rivals such as AirAsia and Scoot.
