Qantas Group will wind up operations of its Singapore-based subsidiary Jetstar Asia, in a move that refocuses investment on the airline’s core Australian and New Zealand markets, the company announced in an ASX statement this morning.
The decision, described as a strategic reallocation of resources, is expected to deliver substantial benefits to the Group’s domestic and trans-Tasman operations.
Thirteen Airbus A320 aircraft currently operated by Jetstar Asia will be progressively redeployed to Australia and New Zealand, aiding fleet renewal efforts and creating approximately 100 new local jobs.
The aircraft, referred to as “mid-life” jets, are part of a broader capital recycling strategy, with the Group indicating the Jetstar Asia closure will release up to AU\$500 million in fleet capital.
These funds will be reinvested in Qantas’s strongest-performing business segments, as well as long-term growth projects such as the ultra-long-haul ‘Project Sunrise’.
“We’re making disciplined decisions which recycle capital across our business and prioritise it to stronger performing segments as well as strategic growth initiatives like Project Sunrise,” said Qantas Group CEO Vanessa Hudson.
Jetstar Asia has struggled to regain pre-pandemic performance levels and is forecast to record an underlying EBIT loss of $35 million this financial year. The closure only affects intra-Asia routes operated from the airline’s Singapore base and will not impact Jetstar Airways’ operations in Australia and New Zealand, nor Jetstar Japan.
In a separate trading update, Qantas also revealed that recent disruptions caused by Cyclone Alfred are expected to reduce earnings by approximately AU$30 million.
