Distribution Strategies

Online travel company Webjet says it has completely defied the comprehensively reported media downturn in the travel industry to deliver a powerful first half year with net profit before tax up 45 percent and total transaction values up 37 percent thus indicating an increasing economy of scale.

Published: 29 Jan 2010

Online travel company Webjet says it has completely defied the comprehensively reported media downturn in the travel industry to deliver a powerful first half year with net profit before tax up 45 percent and total transaction values up 37 percent thus indicating an increasing economy of scale.

The half year ended 31 December 2009 has provided a consolidated profit of A$5.197M (after providing for income tax) compared to a profit (after income tax) for 2008 of $3.701M, an increase of 40.42 percent. The profit before tax for the half year increased from $5.003M to $7.27M, an increase of 45.31 percent. Gross transaction values increased for the half year to 31 December 2009 to $248.0M compared to $181.6M the previous year, an increase of 36.56 percent.

In the six months to December 2008, Webjet increased net profit after tax by 29%. This further increase of 40% on that same period indicates a strengthening momentum against a macro-economic and travel industry environment which remains uncertain.

According to the company, the current macro indicators suggest that Australia may have escaped the worst of the global financial crisis and tentative evidence is emerging that:

Unemployment levels are stabilising and perhaps decreasing.

Air ticket prices both domestically and internationally are showing the first signs of some percentage increase.

However airline capacity was substantially reduced during the industry downturn with the result that airline load factors have in general increased and additional airline capacity that was announced prior to Christmas by Qantas and Jetstar in particular will be progressively added in from around March 2010.

Conversely interest rates are continuing to climb, albeit within a relatively small range and despite the reduction in first home owner grants, the housing market appears to be relatively strong and the Australian stock market has shown substantial recovery.

The company also added that its North American operation is on track for commencement from April onwards.

Also, the full Webjet product range will be shortly released on an iPhone application.