Singapore-based Jetstar Asia, one of the first three budget airlines to operate out of Changi Airport, is finally calling it a day. Valuair, the earliest operator, launched in May 2004 but later merged with Jetstar Asia. Tiger Airways, which also began in May 2004, eventually merged with Scoot. Jetstar Asia, which commenced operations in November 2004, is now shutting down — with Changi Airport deemed too costly for the low-cost carrier.
The airline will cease operations on July 31, grounded by “rising costs and competition in the region,” according to a statement on its website. Parent company Qantas Airways, however, has been more candid. The “unsustainable” cost of operating from Singapore’s Changi Airport was a key reason behind the decision to close Jetstar Asia, Bloomberg reported, citing Qantas executives.
Quantas said: “All [500] affected Jetstar Asia employees will be provided redundancy benefits as well as employment support services. Qantas is also actively working to find job opportunities across the Group and with other airlines in the region.”
This is not the end of the road for the Jetstar brand.
Jetstar Airways — Qantas’ wholly owned budget carrier based in Melbourne — and Jetstar Japan, a joint venture with Japan Airlines, will continue to operate. Both airlines will maintain flights to East and Southeast Asia, undeterred by mounting competition in the region.
Jetstar Asia is bowing out after reportedly turning a profit in only six of its 21 years in operation. The decision comes after Changi Airport raised fees on April 1 to help fund a S$3 billion upgrade. That hike “had an impact on the business,” Jetstar group CEO Stephanie Tully told reporters.
Cash for Qantas
The closure will allow Qantas to redirect funds. As much as A$500 million (S$327 million) may now be channelled into its fleet renewal programme. Jetstar Asia’s 13 Airbus A320 aircraft will also be redeployed to Australia and New Zealand.
Qantas CEO Vanessa Hudson is prioritising the group’s largest market — the Australian domestic network — and juggling assets to support the biggest aircraft order in Qantas history. The airline has nearly 200 new planes on order.
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Jetstar Asia, 49% owned by Qantas, is expected to post an operating loss of A$35 million this financial year. Qantas said in a statement it would take a one-off charge of around A$175 million over two financial years due to the closure.
Changi Airport said it was “disappointed” with Jetstar Asia’s decision but respected the company’s commercial considerations.
With Jetstar Asia’s exit, the Singapore Airlines Group will be the sole Singapore-based airline operator, though many foreign carriers continue to fly in and out of the city-state. Changi welcomed eight new passenger airlines in 2024. As of April 1, 2025, about 100 airlines were operating more than 7,200 weekly scheduled flights from Changi, connecting Singapore to roughly 170 cities worldwide.
The airport handled 67.7 million passenger movements in 2024 — with budget carriers accounting for about a third of the traffic.
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Budget airlines’ growing market and risks
Low-cost carriers have expanded rapidly in Asia over the past two decades. Today, there are more than 50 budget airlines across the region. In markets like India, Thailand, Malaysia, Indonesia, the Philippines, and South Korea, they dominate domestic air travel. IndiGo is now India’s largest domestic airline, with nearly 1,000 Airbus aircraft on order and a growing international network. Malaysia’s AirAsia is another major player with extensive regional reach.
Even full-service carriers have launched budget subsidiaries. Singapore Airlines created Scoot, Qantas established Jetstar, Lufthansa operates Eurowings — and legacy airlines from Canada to China have followed suit. These ventures reflect strong demand for affordable air travel.
But the market isn’t fail-safe. Budget airlines, despite high demand, remain vulnerable. Malaysia’s MYAirline shut down in 2023. Canada’s Jetlines and Lynx Air both folded in 2024, along with LIAT in the Caribbean. Budget carriers have also collapsed in Armenia and Uzbekistan. In the U.S., low-cost operators like Frontier and JetBlue are struggling, while Spirit Airlines has filed for bankruptcy.
There is clearly a market for budget airlines — but the business remains brutally competitive and unforgiving. Carriers may take off with promise, but only the most resilient survive the headwinds. Jetstar Asia’s exit is a sobering reminder: in the cutthroat skies of low-cost aviation, even experience and demand offer no guarantee of survival.
Featured image from Wikimedia Commons (for illustration purposes only)
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