Australia’s Qantas Group has announced a strategic restructuring that will see the closure of Jetstar Asia, its Singapore-based low-cost subsidiary, by July 31st.

The move marks a reallocation of up to A$500 million ( US$325 million ) in capital, aimed at bolstering the group’s ongoing fleet renewal and reinforcing its core businesses in Australia and New Zealand.

The closure will affect only the 16 intra-Asia routes operated by Jetstar Asia from Singapore. It will not impact Jetstar Airways’ international services from Australia into Asia, nor Jetstar Japan’s operations.

Singapore will remain Qantas’ third-largest international hub, supported by nearly 20 codeshare and interline agreements that will continue to link it with broader Asian markets.

"This is one of the most disciplined capital allocation decisions we've made to strengthen the business long-term," says Qantas Group chief executive officer Vanessa Hudson. "We are reinvesting in our highest-return areas and preparing for the most ambitious fleet renewal in our history."

Financial headwinds

Jetstar Asia, launched over two decades ago as a pioneer in Southeast Asia’s budget airline sector, has faced mounting headwinds in recent years. Despite strong operational performance and customer satisfaction, the airline has struggled under rising supplier costs, some up by as much as 200%, alongside high airport fees and intensified regional competition, Qantas says in a statement.

These factors have undermined the unit’s ability to deliver acceptable returns, culminating in expected earnings before interest and taxes loss of A$35 million for the 2025 financial year.

While the decision signals a pullback from the group’s direct intra-Asia operations, it unlocks significant financial flexibility. Thirteen mid-life Airbus A320 aircraft from Jetstar Asia will be redeployed to strengthen Jetstar Airways’ domestic and regional footprint in Australia and New Zealand.

The aircraft will help replace leased assets, reduce operating costs, and support growth in sectors like Western Australia's resource corridor, while also generating new local jobs.

The financial implications are notable. The group anticipates approximately A$175 million in one-off restructuring charges, including asset write-downs and foreign currency translation losses, with around a third recognized in FY25 and the remainder in FY26.

The pre-tax cash impact of the closure is expected to be approximately A$160 million, also mostly in FY26. However, this will be partly offset by working capital efficiencies and tax adjustments arising from the redeployment of aircraft and ongoing operations.