Qantas Airways (ASX:QAN) will wind down its loss-making Jetstar Asia subsidiary in Singapore by 1 July, a move analysts at UBS say will alleviate capital expenditure pressures and allow the airline to sharpen its strategic focus.
The airline announced on Wednesday that the closure would release A$500 million in capital and enable the redeployment of aircraft across its broader network. The shift marks a significant recalibration of Qantas’ international operations in favour of higher-return opportunities.
“We expect the capex benefits to be realised in FY27 and FY28,” UBS analyst Andre Fromyhr and colleagues wrote in a client note.
“We have long held the view that, post Covid, Qantas is more agile in managing its international network and focusing on improving ROIC (return on invested capital) — this decision, to exit loss-making operations, simplify the portfolio, and redeploy the fleet into (predominantly) domestic services, is another strategic move along those lines.”
The decision comes as Virgin Australia prepares for a return to the ASX and resumes long-haul services with the support of Qatar Airways.
Qantas shares were last trading at A$10.99.