Qantas Airways shutters Singapore-based Jetstar Asia on rising costs
SINGAPORE: Australia's Qantas Airways will close its Singapore-based budget airline Jetstar Asia, the group said on Wednesday, blaming rising supplier costs, high airport fees and strong regional competition. The shutdown of the 20-year-old airline next month will result in the loss of up to 500 jobs, a Qantas spokesperson said, and Jetstar Asia's fleet of 13 Airbus A320 planes will be redeployed to Australia and New Zealand. Airlines across Asia, including budget rivals like Singapore Airlines', Malaysia-headquartered AirAsia and Vietnam's VietJet Aviation, have restored and grown their capacity post-pandemic, intensifying competition between carriers and driving airfares down.
Jetstar Asia, which operated 16 intra-Asia routes from Singapore's Changi Airport, has faced growing challenges in recent years and has been unable to deliver returns comparable to stronger-performing core markets within the Qantas group, the company said. The airline has seen 'really high cost increases' at its Singapore base, including double-digit rises in fuel, airport fees, ground handling and security charges, Jetstar Group CEO Stephanie Tully told reporters.
Jetstar Asia, which Tully said reported profits in only six of its 20 years of operation, is expected to post an underlying loss of A$35 million ($22.76 million) before interest and tax in the financial year ending June 30. The airline said Jetstar Asia's closure would release up to A$500 million to be recycled into its core businesses based largely on the value of the 13 planes, including the ability to replace costly leased aircraft that Australia's Jetstar Airways is using domestically.
Jetstar Asia will gradually reduce its schedule before closing on July 31, and customers on cancelled flights will be offered full refunds and moved onto other airlines where possible. Qantas said it would take a one-off financial hit of about A$175 million from Jetstar Asia's closure over two financial years. Qantas shares were trading about 1 percent lower. The group said on Wednesday it continues to see strong demand across its domestic and international businesses.
Cost woes
Tully said Jetstar Asia's cost base was hit particularly hard in the last 18 months to two years. Changi, the world's fourth-busiest airport by international passengers, is steadily raising charges from this year through 2030 to fund investments and higher operating costs. The airport in March 2023 moved Jetstar Asia's operations from Terminal 1 to Terminal 4, the only terminal not connected by train to the other terminals, despite the airline's objections.
'We think it has had an impact on the business,' Tully said. Changi said in a statement it was disappointed by Jetstar Asia's decision to exit Singapore but respected its commercial considerations. Jetstar Asia accounted for around 3 percent of the airport's passenger traffic last year. Changi said it would work with other airlines to fill capacity gaps, including on four routes that no other carrier currently operates.
Australia, New Zealand focus
International operations at Qantas' other budget carriers, Jetstar Airways and Japan-based Jetstar Japan, will not be affected, the airline said. Six of Jetstar Asia's 13 narrow-body aircraft will replace leased aircraft at Jetstar's Australian operations, while four will replace ageing planes Qantas uses to serve the mining industry. Two planes will be deployed to Jetstar in Australia and one in New Zealand to grow capacity and potentially launch new routes, the airline said, in a move that will create more than 100 local jobs.
Employees losing jobs in Singapore will get redundancy benefits and support to find jobs within the Qantas group or other airlines. Singapore's biggest trade union, the National Trades Union Congress, said it was aware of the Jetstar Asia closure ahead of the announcement and was working with Singapore Airlines, the Civil Aviation Authority of Singapore and Changi Airport to find new employment opportunities for the airline's employees. Singapore Airlines said it had set up channels for Jetstar staff to expedite applications for employment within the airline group. - Reuters
Hashtags
Try Our AI Features
Explore what Daily8 AI can do for you:
Comments
No comments yet...
Related Articles
Kuwait Times
3 days ago
- Kuwait Times
Transatlantic airfares slump as West Europeans skip US travel
Summer airfares from Europe to US drop to pre-pandemic levels NEW YORK: Airfares from Europe to the United States have dropped to rates not seen since before the pandemic, as travelers from Western Europe lead a pullback in travel to the US that is expected to continue through at least July. Overseas arrivals to the United States fell 2.8 percent in May from a year ago, according to preliminary data from the US National Travel and Tourism Office within the US Department of Commerce. Travel from Western Europe fell 4.4 percent in May although travel from Eastern Europe rose 4.6 percent in the same period. Forward bookings suggest sustained declines are on the horizon, with total inbound bookings to the US in July down 13 percent year-over-year, according to OAG Aviation, an analytics firm. Transatlantic airfare has been declining since the first quarter when Europeans started reconsidering travel to the US after President Donald Trump suggested annexing Greenland, launched a global trade war, and issued orders that focus on stricter border policy. A stronger dollar has also deterred some trips. In March, travel from Western Europe fell 17 percent year-over-year, according to the NTTO. Average round-trip economy airfares for over 50 routes from the US to Europe in the first quarter were down an average of 7 percent year-over-year, with rates to fly between Atlanta, Georgia, and London, down 55 percent, according to data from Cirium, an aviation analytics firm. As American consumers have been bargain-hunting and waiting closer to their departure dates to finalize travel plans, the decline in demand from Europe is another factor contributing to cheaper travel. 'Fewer seats filled by European travelers to the US, and a slower pace of growth in US outbound to Europe than last year, will tend to cast 2025 as a tougher year to make money on transatlantic routes,' said Aran Ryan, director of industry studies at Tourism Economics, a subsidiary of Oxford Economics. This summer, the price of round-trip tickets from the US to Europe is down 10 percent compared with a year ago, travel booking app Hopper said. Average fares of $817 per ticket are in line with prices to Europe in the summer of 2019 before the pandemic. Major carriers, including Air France KLM and Germany-based Lufthansa, expect slowing activity. Lufthansa CEO Carsten Spohr said the company expects weaker demand in the third quarter, while Air France KLM CEO Ben Smith said the company is seeing a 'slight pullback' in transatlantic traffic and will slash prices to keep cabins on its transatlantic flights full. Airlines including Lufthansa and US air carrier United Airlines say higher demand from US travelers flying to Europe is offsetting the decline of Europeans flying the opposite direction. United said international bookings from Europe fell 6 percent in the first quarter, but added that US-originating demand made up for the pullback. Rival Delta Air Lines said 80 percent of its long-haul international demand originates from the US, and fares in the region are 'significantly higher' than in the rest of the world. Lufthansa said it plans to market its transatlantic flights to more Americans given the higher demand, despite travel from Western Europe showing moments of recovery. Travel from the region to the US increased 12.1 percent in April before falling again in May, according to data from the NTTO. As of mid-May, there are 4.3 percent more international flights scheduled to depart from US airports for international destinations this summer, said Hopper. 'We feel really good about the transatlantic market,' American Airlines CFO Devon May said at a Wolfe Research transportation and industrials conference in May. — Reuters
Arab Times
5 days ago
- Arab Times
WhatsApp to start showing ads to users in parts of the messaging app
NEW YORK, June 17: WhatsApp said Monday that users will start seeing ads in parts of the app, as owner Meta Platforms moves to cultivate a new revenue stream by tapping the billions of people that use the messaging service. Advertisements will be shown only in the app's Updates tab, which is used by as many as 1.5 billion people each day. However, they won't appear where personal chats are located, developers said. "The personal messaging experience on WhatsApp isn't changing, and personal messages, calls, and statuses are end-to-end encrypted and cannot be used to show ads,' WhatsApp said in a blog post. It's a big change for the company, whose founders Jan Koum and Brian Acton vowed to keep the platform free of ads when they created it in 2009. Facebook purchased WhatsApp in 2014, and the pair left a few years later. Parent company Meta Platforms Inc. has long been trying to generate revenue from WhatsApp. WhatsApp said ads will be targeted to users based on information like their age, the country or city where they're located, the language they're using, the channels they're following in the app, and how they're interacting with the ads they see. WhatsApp said it won't use personal messages, calls, and groups that a user is a member of to target ads to the user. It's one of three advertising features that WhatsApp unveiled on Monday as it tries to monetize the app's user base. Channels will also be able to charge users a monthly fee for subscriptions so they can get exclusive updates. And business owners will be able to pay to promote their channel's visibility to new users. Most of Meta's revenue comes from ads. In 2025, the Menlo Park, California-based company's revenue totaled $164.5 billion, and $160.6 billion of it came from advertising.
Arab Times
14-06-2025
- Arab Times
Find Out Which Airlines Are Still Flying After Israel-Iran Conflict
KUWAIT CITY / DUBAI / LONDON, June 14: Airlines across the world have scrambled to reroute or suspend services through the Middle East after Iran temporarily closed its airspace following a wave of missile strikes reportedly carried out by Israel on June 13. This marks a significant escalation in regional tensions, prompting global aviation authorities and airlines to take swift action. Air Arabia UAE-based Air Arabia suspended flights to at least 10 regional destinations, including Iran, Iraq, Jordan, Russia, Armenia, Uzbekistan, Azerbaijan, Georgia, Kyrgyzstan, and Kazakhstan. The decision came shortly after Iran closed its airspace to all civilian flights in response to Israeli airstrikes on key military targets. Kuwait Airways Kuwait Airways continues to operate but has suspended flights to Jordan. Kuwaiti civil aviation authorities have also confirmed coordination with international partners to monitor security developments. Jazeera Airways Jazeera Airways, the Kuwaiti low-cost airline, has suspended flights to Iran and is closely tracking developments. While services to high-risk destinations have been avoided, the airline is keeping alternate routing plans ready should further escalation occur. Airlines globally have responded with widespread cancellations, rerouting, or suspension of flights: El Al (Israel): Suspended all operations temporarily due to safety and airspace closures United, American, Deltat: Suspended Tel Aviv flights; rerouting European routes to avoid Middle East skies Lufthansa Group: Halted flights to Tel Aviv, Tehran, Beirut, Amman, and Erbil Air France–KLM & Transavia: Cancelled Tel Aviv and Beirut flights EasyJet, Ryanair, Vueling: Suspended all Tel Aviv operations, some affected through August 2025 Qatar Airways, Emirates, Etihadt: Rerouting flights; avoiding Iran and nearby regions Singapore Airlines, EVA Air, China Airlines: Rerouted long-haul routes to bypass Iran Air India, IndiGo: Delayed or diverted flights; avoiding Iranian airspace Turkish Airlines: Continuing flights with adjusted air corridors; heavy security protocols in place As of June 14, the following countries have closed or severely restricted their airspace to civilian traffic: Iran Israel Iraq Jordan Syria In addition, international regulators such as EASA, FAA, and ICAO have issued updated travel and airspace advisories, urging carriers to avoid overflying these regions due to elevated military activity and risk of misidentification. Impact on Passengers and Travel Plans - Longer travel times expected for Europe–Asia and Gulf–Levant routes. - Higher ticket prices may result from fuel surcharges and fewer available flights. - Flight cancellations and rebookings are ongoing—travelers are urged to check airline websites and airports regularly. Travel Advisory for Middle East Flights Passengers flying to or from the Middle East—especially through hubs like Dubai, Doha, Istanbul, and Kuwait—should: Confirm flight status regularly with airlines. Avoid non-essential travel to high-risk destinations, including Israel, Lebanon, Iran, Iraq, and Jordan.
