Webjet Navigates Turbulence with Strategic Investments Amid Softer Travel Demand
Webjet Group’s preliminary 1H26 results reveal resilience in a challenging market, with underlying EBITDA in line with expectations despite a 9% decline. The company revises FY25 figures following an accounting policy change and lowers FY26 EBITDA guidance amid subdued domestic leisure travel and a delayed brand relaunch.
- 1H26 underlying EBITDA of $14.4 million, down 9% year-on-year
- FY25 results revised due to change in gift card revenue recognition policy
- FY26 underlying EBITDA forecast lowered to $30-$32 million, reflecting market softness
- ACCC infringement notice delayed brand relaunch and marketing efforts
- Progress on FY30 Strategic Plan with investments in international flights, business travel, and AI technology
Preliminary 1H26 Performance Amid Industry Headwinds
Webjet Group Limited (ASX, WJL) has released its preliminary unaudited results for the first half of fiscal 2026, reporting an underlying EBITDA of $14.4 million. While this figure aligns with company expectations, it marks a 9% decline compared to the revised first half of 2025. The results underscore the resilience of Webjet’s core operations despite a challenging macroeconomic environment marked by geopolitical tensions, trade disruptions, and elevated domestic airfares following Rex’s exit from key routes.
The travel industry’s softness was particularly evident in the domestic leisure segment, which remained subdued throughout the period. Conversely, international outbound bookings showed growth, especially in short-haul Asian destinations, although these typically generate lower revenue than long-haul routes to Europe and North America.
Accounting Policy Revision and Impact on Historical Results
Webjet undertook a comprehensive review of its revenue recognition policies, resulting in a retrospective change concerning gift card liabilities. The revised policy aligns revenue recognition with the expiration of gift card liabilities under Australian Consumer Law, which occurs after three years. This adjustment led to a downward revision of FY25 underlying EBITDA to $35 million from $39.4 million, enhancing transparency and comparability but not affecting cash flow.
FY26 Outlook and Strategic Initiatives
Looking ahead, Webjet has lowered its FY26 underlying EBITDA guidance to a range of $30 million to $32 million, representing a 9% to 14% decrease from the prior year. This conservative outlook reflects ongoing subdued domestic leisure travel demand, persistent macroeconomic pressures, and a delayed brand relaunch caused by an Australian Competition and Consumer Commission (ACCC) infringement notice. The notice, which was displayed on Webjet’s websites for two months, led to reduced traffic and bookings, prompting the company to postpone marketing activities to optimize the relaunch impact.
Despite these near-term challenges, Webjet remains committed to its FY30 Strategic Plan, which focuses on expanding international flight market share, enhancing hotel and package offerings, accelerating business travel growth through the acquisition of Locomote Holdings, and refreshing its brand and loyalty programs. The company has also embraced AI-driven technology to improve operational efficiencies and customer experience, partnering with global players like Amazon to pioneer agentic AI solutions.
Leadership Confidence and Capital Management
CEO Katrina Barry emphasized that while market conditions have softened, the company’s long-term growth trajectory remains intact. She highlighted the importance of maintaining financial discipline and responsible capital deployment to sustain the transformation roadmap. Webjet’s strong and unleveraged balance sheet positions it well to navigate the current environment and capitalize on growth opportunities when market conditions improve.
Investors can expect a more detailed update on Webjet’s progress and capital management initiatives at the upcoming results presentation scheduled for 19 November 2025.
Bottom Line?
Webjet’s disciplined approach and strategic investments set the stage for long-term growth, but near-term market softness and regulatory impacts warrant close monitoring.
Questions in the middle?
- How will the delayed brand relaunch affect Webjet’s competitive positioning in the short to medium term?
- What is the expected financial impact of the Locomote acquisition on Webjet’s 2H26 results and beyond?
- How might ongoing geopolitical tensions and elevated airfares influence domestic and international travel demand moving forward?