SYDNEY - Australian airline Qantas announced on Wednesday that it will close its intra-Asian subsidiary Jetstar Asia, citing rising costs and increased competition in the region.

The Qantas Group said in a statement to the Australian Securities Exchange (ASX) that the Singapore-based budget carrier will close by the end of July, eliminating around 500 jobs in the region.

It said that due to rising supplier costs, high airport fees and intensified competition in the region, Jetstar Asia is expected to report an underlying loss of 35 million Australian dollars ($22.7 million) for the 2024-25 financial year.

READ MORE: Australian airline Jetstar set for 24-hour strike over low pay

Vanessa Hudson, chief executive officer of the Qantas Group, said that Jetstar Asia has been a "pioneering force" in Asian aviation for over 20 years, making air travel accessible to millions of customers.

"Despite their best efforts, we have seen some of Jetstar Asia's supplier costs increase by up to 200 percent, which has materially changed its cost base," she said.

The closure will only affect the airline's intra-Asian routes from Singapore. Jetstar Airways will continue flying from Australia to Asian destinations.

Hudson said Jetstar Asia's 13 mid-life A320 aircraft will be progressively redeployed to Australia and New Zealand, creating 100 local jobs and supporting the group's ongoing major fleet renewal.

Jetstar Asia will continue to run flights on a progressively reduced schedule for the next seven weeks before its final grounding on July 31.

READ MORE: Report: Australia's aviation sector recovers to pre-pandemic levels

The Qantas Group said that customers with bookings on cancelled flights will be offered full refunds and that the company will seek to find alternative flights.