Today, Qantas announced the closure of its Singapore-based budget carrier, Jetstar Asia, as part of its strategic focus on enhancing operations in Australia and New Zealand.

The decision will free $500 million for Qantas Group to invest in its fleet renewal plans. Around 500 lobs will be lost from the Asia region.

According to Qantas, the 13 Jetstar Asia Airbus A320 aircraft will be gradually allocated to Australia and New Zealand, which is expected to increase the availability of low-cost fares and create more local employment opportunities.

Jetstar Asia has been impacted by rising supplier costs, high airport fees, and intensified competition in the region.

Vanessa Hudson, chief executive of Qantas Group, indicated that the company has been facing significant supplier cost increases of up to 200 per cent, which have substantially affected its cost structure.

“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,” she said.

“This is a very tough day for them.”

Hudson said Jetstar Asia’s 13 mid-life A320 aircraft will be progressively redeployed to core markets in Australia and New Zealand to create more than 100 local jobs and more low fares, including on regional routes.

“We are currently undertaking the most ambitious fleet renewal program in our history, with almost 200 firm aircraft orders and hundreds of millions of dollars being invested into our existing fleet,” she said.

The airline is expected to post a $35 million underlying Earnings Before Interest and Taxes (EBIT) loss this financial year, prior to the closure decision.

Jetstar Asia was launched more than 20 years, but has recently faced stiff competition from other low-cost carriers and a hike in operating costs.

The airline will stop operating on July 31. Flights will run for the next seven weeks.