Webjet Group shares tumbled more than 10 per cent on Wednesday after the online travel agency revealed Virgin Australia would slash its commission payments from July and posted a decline in underlying profit for FY26.
Shares in the ASX-listed company (WJL) fell to 43.5 cents, extending a difficult run that has seen the stock lose more than half its value since the start of the year.
The immediate trigger was Webjet’s disclosure that Virgin Australia had informed it of plans to substantially reduce commission streams and commercial arrangements from 1 July 2026. Webjet said the change would have trimmed around $3 million from FY26 revenue had it taken effect at the start of the financial year, with the impact expected to flow directly to the bottom line.
Yesterday Virgin revealed that is going back into selling its own packages, suggesting the airline is pursuing a more direct to consumer model.
Virgin Australia re-enters holiday packages market with VA Holidays
The news compounds an already challenging outlook. Webjet enters FY27 contending with softer consumer sentiment, geopolitical uncertainty, higher airfare pressure, and upcoming RBA surcharging regulation changes that management acknowledged would materially affect trading conditions.
Full-year results released alongside the update showed a business under margin pressure. Revenue edged up 1 per cent to $136.4 million and statutory net profit after tax rose 85 per cent to $3.7 million, but underlying EBITDA dropped 20 per cent to $28.1 million and underlying NPAT fell 24 per cent to $13.6 million. Total bookings declined 7 per cent to 1.4 million.
The core OTA business remained the group’s largest earnings contributor with EBITDA of $38.7 million, though bookings there fell 9 per cent and EBITDA was down 18 per cent. The Cars and Motorhomes division was a bright spot, with EBITDA rising to $4.3 million from $1.6 million.
Group CEO Katrina Barry said the company would adjust its commercial strategy in response to the Virgin changes, drawing a parallel to the industry-wide airline commission cuts that followed COVID.
“Same as five or six years ago when airline commissions dropped 80 per cent coming out of COVID – what we did as an organisation was adjust and pivot,” she said. “We will be adjusting and pivoting on commercial, on strategy, on focus to ensure that we optimise.”
Barry said Virgin remained a valued long-term partner and that targeted marketing campaigns would continue despite the shift in economics.
Management flagged cost control, automation, artificial intelligence, and capital discipline as priorities for the year ahead. The balance sheet remains solid, with $93.9 million in net cash and no debt as of 31 March.
