Budget airline Jetstar Asia to close in weeks, customers offered refunds

Singapore-based budget airline Jetstar Asia will close down at the end of July, with affected engers to be offered full refunds.

The low-cost airline has struggled with rising supplier costs, high airport fees and increased competition in the region. More than 500 employees will be laid off.

The shutdown of Jetstar Asia will not impact the operations of Australia-based Jetstar Airways, nor those of Jetstar Japan, according to its part-owner Qantas.

The budget carrier will offer a progressively reduced service over the next seven weeks and travellers will be notified if their flight is affected. engers with tickets to fly after the 31 July closure will be ed by the airline.

Some affected customers could be moved onto alternative flights operated by the Qantas Group. Jetstar Asia is advising people who booked through a travel agent or separate airline to those providers directly.

Sixteen routes across Asia will be impacted by the shutdown, including flights from Singapore to destinations in Malaysia, Indonesia and the Philippines.

The closure of Qantas' low-cost arm will provide Australia's national airline with A$500m ($325.9m; £241.4m) to invest towards renewing its fleet of aircraft. It will also redeploy 13 planes for routes across Australia and New Zealand.

"We have seen some of Jetstar Asia's supplier costs increase by up to 200%, which has materially changed its cost base," said Qantas Group Chief Executive Vanessa Hudson in a statement.

The discount airline, which has operated flights for over 20 years, is set to make a A$35m loss this financial year.

Fifty one per cent of the company is owned by Singapore firm Westbrook Investments, with the remainder held by Qantas.

Former customers have expressed their shock and sadness at its closure.

In a comment under Jetstar Asia's Facebook post about the shutdown, one said they were "very saddened to hear this news about a very warm, efficient, wonderful airline".

Another thanked the airline for "opening up and popularising the budget travel market".

All employees affected by Wednesday's announcement will be provided with redundancy benefits.

"We have an exceptional team who provide world leading customer service and best in class operational performance and our focus is on ing them through this process and helping them to find new roles in the industry," said Jetstar Group chief executive Stephanie Tully.

Qantas, Australia's national carrier, will continue to provide low-cost flights to Asia through its Jetstar Airways arm, which offers services from Australia to destinations in Thailand, Indonesia and Japan, among others.

Jetstar Asia was launched in 2004 as Qantas looked to gain a foothold in the growing low-cost air travel market in Asia, but has faced increased competition from other budget outlets including AirAsia and Scoot.