Qantas shares slip on Jetstar Asia closure
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More news: Qantas shares fell in morning trade after the airline announced the closure of its Singapore-based subsidiary Jetstar Asia.
Qantas shares were down 1.5% to $10.48 at 11:30am AEST but have added more than 70% over the last 12 months.
Qantas to shut down Jetstar Asia
The news: Qantas will close its intra-Asia airline Jetstar Asia as part of what it describes as a strategic restructure aimed at strengthening its core businesses in Australia and New Zealand.
The numbers: Qantas said the closure of Jetstar Asia — the group's Singapore-based, low-cost subsidiary — will enable the airline to recycle up to $500 million in capital and support its fleet renewal program.
Australia's flag carrier said 16 intra-Asia routes will be impacted by the closure, with no changes to Jetstar Airways and Jetstar Japan services into Asia. Jetstar Asia will continue to operate flights for the next seven weeks on a progressively reduced schedule, before its final day of operation on 31 July.
Thirteen Jetstar aircraft will be progressively redeployed to Australia and New Zealand as part of the move.
The combined financial impact of the closure is estimated to be approximately $175 million in underlying earnings, with around a third in FY25 and the remainder across FY26.
The context: Qantas flagged that Jetstar Asia has faced growing challenges in recent years, and the decision to close the airline was made jointly with its majority shareholder Westbrook Investments.
Qantas said its subsidiary has been impacted by rising supplier costs, high airport fees and intensified competition in the region.
What they said: "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," said Qantas group CEO Vanessa Hudson.
"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%, which has materially changed its cost base."
The source: ASX
