Refer China: Two Airlines Announce Shutdowns Within a Week ： What's Behind?

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Two Airlines Announce Shutdowns Within a Week: What's Behind?

Recently, two long-established regional carriers in the Asia-Pacific region have announced their closure, raising concerns about the current state of the market.

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Jetstar Asia, a low-cost airline under the Qantas Group, will cease operations on July 31, 2025.

Thai Airways International has completed the legal dissolution of its subsidiary, Thai Smile Airways.

These two events have sparked questions: Why are these airlines struggling to survive?

Jetstar Asia: From Regional Pioneer to an Unavoidable Shutdown

Jetstar Asia, a low-cost carrier launched by the Qantas Group in Singapore over 20 years ago, had once been a leader in providing affordable travel across Southeast Asia. It offered millions of passengers a budget-friendly way to travel within the region.

However, in recent years, the operating environment has become increasingly challenging, and Qantas has decided to shut down the airline. According to the Qantas Group, while Jetstar Asia has maintained strong customer service and operational performance, its profitability has been severely impacted. The rising costs of airline suppliers (some soaring by up to 200%), expensive airport fees, and growing competition have eroded the airline's low-cost advantage. In the 2025 financial year, Jetstar Asia is expected to report an EBIT loss of 35 million AUD.

The closure of Jetstar Asia will release approximately 500 million AUD in capital, which will be used to support Qantas' historic fleet renewal plan.

Qantas Group CEO, Vanessa Hudson, commented, "This is a tough decision, but we must adopt a conservative capital strategy and focus our resources on more profitable parts of our business."

Thai Smile Airways: 12 Years of Losses Lead to Its Closure

Founded in July 2012, Thai Smile Airways was positioned as a "regional airline offering premium services," aiming to fill the gap between low-cost carriers and full-service airlines. The company's routes covered both domestic and neighboring international markets.

However, over the past 12 years, Thai Smile Airways has failed to turn a profit, accumulating a loss of over 20.9 billion Thai Baht (about 580 million USD), and its equity became negative by approximately 9.7 billion Thai Baht.

On June 5, 2025, Thai Airways submitted a report to the Stock Exchange of Thailand (SET), announcing that it had completed the legal dissolution process of Thai Smile Airways, which was a fully-owned subsidiary of Thai Airways with a 99.99% stake.

Initially capitalized at 1.8 billion Thai Baht, Thai Smile's annual losses persisted from the very beginning, with the worst year seeing a deficit of over 4 billion Thai Baht.

These closures of Jetstar Asia and Thai Smile Airways reflect a larger trend of struggling regional carriers in the Asia-Pacific. With rising operational costs, increasing competition, and market shifts, airlines that once thrived are now finding it difficult to remain viable in an increasingly tough environment.

Source: 环球旅讯