Australia’s Qantas Airways will close its Singapore-based budget carrier at the end of next month, blaming intense regional competition and surging supplier costs.

Qantas Airways Ltd. said low-cost subsidiary JetStar Asia will close next month, freeing up as much as A$500 million ($327 million) in capital to fund the group’s fleet renewal program.

The Qantas Group on Wednesday announced the closure of operations of Jetstar Asia, its low-cost Singapore-based airline, by the end of July.