In a significant development for the aviation industry, Jetstar Group executives have revealed that the impending closure of its Singapore-based budget airline, Jetstar Asia, is partly due to escalating operational costs associated with Changi Airport. The airline announced on June 11, 2025, that it would cease operations on July 30, 2025, citing these rising costs as a major factor that has placed “unsustainable pressure” on its ability to maintain low fares.
Jetstar Group CEO Stephanie Tully addressed the media, highlighting the substantial cost increases the airline has faced at its Singapore hub. According to Tully, there have been double-digit rises in various expenses, including fuel, airport fees, ground handling, and security charges. These increases have compounded the financial challenges faced by Jetstar Asia, which has struggled to achieve profitability throughout its 21 years of operation since its inception in 2004.
Financial Struggles and Future Implications
The financial outlook for Jetstar Asia is concerning, with its parent company, Qantas Group, projecting an underlying loss of A$35 million (approximately S$29 million) before interest and tax for the financial year ending June 30, 2025. The closure of Jetstar Asia is expected to free up as much as A$500 million (around S$416 million) for Qantas, allowing the airline to reinvest in its core businesses and enhance long-term returns.
Tully noted that the cost increases have affected the entire ecosystem of Jetstar Asia, with airport fees being a significant contributor to the airline’s financial difficulties. The airline’s struggle to maintain competitive pricing in the face of rising operational costs has ultimately led to the decision to shut down its Singapore operations.
Changi Airport’s Response to Fee Increases
In response to the concerns raised by Jetstar Group, Changi Airport Group (CAG) stated that the fee hikes implemented at the airport are applied uniformly to all carriers and represent only a small portion of the total operating costs for airlines. CAG emphasised its commitment to working collaboratively with airlines, including Jetstar Asia, to enhance productivity and cost-efficiency.
The airport authority has been proactive in its efforts to stimulate demand through marketing initiatives and to explore new route opportunities with Jetstar Asia over the years. CAG’s response indicates that while the fee increases are a factor, they are not the sole reason for the airline’s closure.
As the aviation landscape continues to evolve, the closure of Jetstar Asia serves as a stark reminder of the challenges faced by budget airlines operating in a competitive environment. The implications of this decision will likely resonate throughout the industry, prompting discussions about the sustainability of low-cost carriers in the face of rising operational costs and the need for strategic partnerships between airlines and airport authorities.