Feb 3 (Reuters) - Australia's Qantas Airways will sell its stake in low-cost carrier Jetstar Japan as the flagship airline moves away from its budget international businesses to focus on core domestic operations.
The decision to sell its 33.32% stake in Jetstar Japan comes after the closure of its Singapore-based Jetstar Asia in July as Qantas grappled with intense regional competition and high fuel and supplier costs, resulting in underwhelming performance.
The move will also enable Qantas to focus
resources on its core operations in Australia, Qantas and Jetstar Airways, even as it undertakes its largest fleet renewal programme ever while grappling with slower-than-expected growth.
In November, it forecast domestic unit revenue growth at the lower end of its 3%–5% earlier projection for the six months to December 2025, with capacity constrained by delays in returning its A380s to service.
Qantas has yet to finalise the terms of the deal. Japan Airlines and Tokyo Century Corp will retain their 50% and 16.7% stakes, respectively, while the Development Bank of Japan intends to join as a shareholder, the companies said in a joint statement on Tuesday.
Jetstar Japan was established more than a decade ago by Qantas, Japan Airlines, and Mitsubishi Corp. It began operating as a low-cost carrier in late 2012 out of Narita airport near Tokyo.
The new shareholder group, entirely made up of Japanese investors, intends to overhaul and rebrand Jetstar Japan and expand its international routes, the companies said.
"By moving to this new structure, we will respond flexibly to market changes and maximise synergies with the JAL Group to achieve sustainable growth for JJP (Jetstar Japan) as a key LCC (low-cost carrier) at the expanding Narita Airport," Japan Airlines Group CEO Mitsuko Tottori said.
Qantas shares finished 0.3% higher at A$10.20 apiece, paring earlier gains of as much as 1.4%. Japan Airlines shares were trading around 1% higher in the afternoon session in Tokyo.
(Reporting by Nichiket Sunil and Sameer Manekar in Bengaluru; Editing by Subhranshu Sahu)
