Webjet roars back to profit with $150 million turnaround

Travel giant Webjet has emerged from the COVID-19 pandemic stronger than it was before operations were largely grounded in 2020, reporting a $150 million profit turnaround in the past financial year.

The $2.9 billion travel business swung back to an underlying profit of $134.8 million in the 12 months to March 31, after a $15 million loss before interest, tax, depreciation and amortisation the year prior. Revenue increased by 164 per cent this year to $364.4 million, thanks to growth in Webjet’s hotels division, WebBeds, which more than made up for a lag in its motorhome and car rental unit, GoSee.

Chief executive officer John Guscic said on Wednesday the company had taken the pandemic as an opportunity to streamline its divisions – WebBeds, WebJet and GoSee – and cut costs. He said those measures had positioned the business to gain market share and capitalise on future returns.

“We see an opportunity in front of us to substantially propel the overall business to well above market over the next three to five years,” Guscic said. “We don’t think we’ll be impacted by macro events due to our market growth.”

The group’s Webjet division is hovering at about 80 per cent of its pre-pandemic revenue, but Guscic said this number was closer to 90 per cent when accounting for COVID-19 booking credits, which have now been processed. He expressed confidence that the division would return to its pre-pandemic performance once airfares begin to stabilise and more inbound airlines begin servicing Australia.

“Long-haul travel has taken a long time to stabilise and Australia is ultimately a long-haul destination. WebJet will return to normality once more carriers return,” he said.

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Despite the company’s return to profit, the revenue of its motorhome rental business GoSee is lagging at just 55 per cent of pre-pandemic sales.

Guscic said GoSee continues to be affected by global supply-chain shortages on the number of motorhomes available as well as the slower-than-expected return of international holidaymakers to Australia. According to Webjet’s data, the bulk of visitors to Australia remain people visiting friends and family, who are less likely to hire a vehicle such as a campervan.