Hundreds of jobs will go as Qantas permanently grounds its Singapore-based budget arm Jetstar Asia.

The final Jetstar Asia fight will take off on July 31 and 500 Singapore-based workers will lose their jobs as Qantas Group sharpens its focus on Australian and New Zealand markets.

The national carrier said the move would free up $500 million to invest in its fleet renewal plans – as one expert predicted passengers could be the big winners.

It will also free up more than a dozen Airbus A320 aircraft to be redeployed in Australia and New Zealand. Qantas said that would create 100 local jobs.

Sydney University transport professor Rico Merkert said the shift was good news for domestic passengers, who may get newer aircraft and lower fares.

“More capacity added to the market has even more competition, say with Virgin or other domestic carriers,” Merkert said.

“Airfares should come down in Australia somewhat.”

Jetstar Asia is on track to make a $35 million loss by the end of the 2024/25 financial year, while Qantas Group recorded $1.5 billion in earnings in the last six months of 2024.

“Yields here in Australia and demand are very healthy. Qantas would be silly not to try to make use of that and deploy as much capacity as they can,” Merkert said.

“It’s not easy to come by new aircraft at the moment, so even if they go to Airbus or Boeing, those aircraft wouldn’t become available before 2027, 2028 or something like that.

The fastest way of boosting capacity was redeploying aircraft from Asia, he said.

Under the plan, there are no changes to flights connecting Australian airports to destinations in Asia or changes to Jetstar Japan services.

In a statement to the ASX on Wednesday, Qantas Group attributed the closure of Jetstar Asia to greater competition, rising supplier costs and high airport fees.

Qantas Group chief executive Vanessa Hudson said it was a “very tough day” for staff and the airline had made low-cost travel accessible to millions of customers over more than 20 years.

“We have seen some of Jetstar Asia’s supplier costs increase by up to 200 per cent, which has materially changed its costs base,” Hudson said.

The airline said the move would “unlock” up to $500 million in capital, which would be reinvested into its core businesses.

Hudson said Qantas was focusing on growth areas including ultra long-haul flights, under its “Project Sunrise” initiative. The first plane capable of flying direct from Sydney to London and New York is due to arrive in July.

Qantas will also launch new routes in the second half of 2025, including Adelaide-Auckland and Perth to Auckland and Johannesburg.

Australian domestic economy airfares fell 12 per cent between January and February 2024 and the same months this year, corporate travel adviser FCM Consulting has found.

That’s despite the Australian Competition and Consumer Commission warning the dominance of Qantas and Virgin had limited local market competition.

Australians will also be able to take advantage of more flights to Europe from the second half of 2025 due to Virgin Australia’s partnership with Qatar Airways. The airlines claim it will put further downward pressure on international prices.

Qantas said passengers with bookings for cancelled flights will be entitled to refunds or moved onto other flights.

Jetstar Asia employees were entitled to redundancy benefits and would be re-employed within Qantas where possible.

Western Sydney moves on

Prime Minister Anthony Albanese has cut the ribbon on the completed terminal at the Western Sydney Airport.

Air New Zealand announced on Wednesday that it will begin using the airport in 2027, joining Qantas, Jetstar and Singapore Airlines.

Airport chief executive Simon Hickey said there had been talks with more than 30 airlines, and more carriers were likely to join before the $5.3 billion project opened in late 2026.

-with AAP