Qantas Airways Ltd. said low-cost subsidiary JetStar Asia will close next month, freeing up as much as A$500 million ($327 million) in capital to fund the group’s fleet renewal program.
Singapore-based JetStar Asia, which is 49% owned by Qantas, is expected to post a A$35 million underlying operating loss this financial year in the face of intensifying competition and rising costs, Qantas said Wednesday. Thirteen Jetstar Asia Airbus A320 aircraft will be redeployed to Australia and New Zealand.
Qantas Chief Executive Officer Vanessa Hudson is prioritizing the group’s cash cow, the Australian domestic network, as she juggles assets to pay for the biggest plane order in the airline’s history. Qantas has firm orders for almost 200 new aircraft.
Only 16 intra-Asia routes will be impacted by the JetStar Asia closure. Jetstar Airways and Jetstar Japan services into Asia are unchanged.
Jetstar Asia will operate flights on a progressively reduced schedule before its final day of operation on July 31.
