Business

Australia’s Webjet Shares Crash 15% After Virgin Australia Deal Hurts FY27 Outlook

S

Shivangi

May 20, 2026 4:17 PM IST

Category Business

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Synopsis

Webjet shares plunged more than 15% after the Australian travel company warned that reduced commission payments from Virgin Australia would impact future earnings. The company also reported weaker FY26 underlying profits, falling bookings, and softer travel demand across its online travel business. Management said FY27 conditions are expected to remain challenging due to inflation, lower consumer confidence, geopolitical tensions, and changes to airline commission arrangements. Despite the weak outlook, Webjet maintained a strong balance sheet with nearly $94 million in net cash and no borrowings. The stock is now down more than 50% since the start of 2026.

Shares of Webjet Group Ltd slumped 15% after the travel firm said it would suffer a hit to future earnings due to lower commission payments from Virgin Australia. The firm also announced declining bookings, plunging profits and continued pressure from weak travel demand.

Key Highlights

• Webjet shares fell more than 15% on Wednesday
• Shares have lost 52% since the beginning of 2026
   Key commission arrangements cut by Virgin Australia
• Underlying EBITDA in FY26 reduced by 20%
• Firm bracing for headwinds in FY27

Commission Cuts Give Webjet a Hit

Webjet Group Ltd shares fell 15.31% to 41.5 cents in Wednesday's trade after announcing changes to its commercial deal with Virgin Australia. Virgin Australia plans to reduce commissions and commercial arrangements, and Webjet stated this from July 1, 2026. 

The travel company said the changes would’ve cut FY26 revenue by about $3 million if they had been in place for a full year. Investors are worried given the weaker travel demand environment and how the company is being squeezed across its online travel business.

Results Hit By Falling Bookings And Profit Pressure

In FY26, Webjet posted 1% higher revenue (to $136.4m) but its statutory net profit after tax more than doubled (+85%) to $3.7m. Underlying EBITDA fall 20% to $28.1 million with underlying NPAT slipping 24% to $13.6 million. Total bookings fell 7% to 1.4 million and gross transaction value dipped 3% to $1.46 billion. The firm kept its online travel agency core business the largest driver of earnings, but bookings on this front dropped 9% and EBITDA sank 18%, due to weaker consumer demand and pricing pressures still felt across the sector.

Webjet shares under pressure on tough FY27 outlook

Management said FY27 trading will remain challenging due to lower commissions from airlines, Reserve Bank surcharging rule changes, geopolitical tensions, inflation and low consumer confidence. Uncertain conditions will see the company focus on automation, AI and cost control while protecting its balance sheet, it said. Webjet, which has a limited net cash of A$93.9 million at the end of FY26 and no debt against an extended weak outlook. The company has also announced a final dividend of 2 cents per share, bringing total FY26 dividends to 4 cents per share. Webjet shares are 28% lower over the month and down 52% for 2026 even after Wednesday’s selloff.

FAQs

1. Why Webjet shares dropped today.

The lower Virgin Australia commissions will hurt profitability in future, the company warned.

2. How far have Webjet shares dropped?

Shares were down more than 15% during trading on Wednesday.

3. What happened to the profits at Webjet?

The companies’ underlying EBITDA and underlying NPAT both decreased during the year.

4. What challenges is Webjet facing?

Low level of travel demand Weakness, inflation, drop in airline commissions and soft consumer confidence.

5. How is Webjet’s balance sheet?

The business was left with net cash of $93.9 million and no debt.

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