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Updated May 20, 2026 — 1:10pm,first published 10:20am
Travellers looking for cheap flights on Webjet may find fewer airfare deals in the future after Virgin Australia slashed the commissions it pays the online travel agent to cut out the middleman and send consumers directly to its own site to maximise sales.
The airline’s move is compounding headwinds for Webjet, which warned investors on Wednesday that operating conditions will remain “fluid and challenging” amid the ongoing war in the Middle East, inflation pressures and low consumer sentiment.
The company posted a 20 per cent earnings slump for the year through March, is scrambling to keep up with technology and is battling upheaval in its management ranks.
“Virgin Australia, one of our key partners, has advised us that with effect from the first of July, they will substantially reduce their commission streams and commercial arrangements with us,” CEO Katrina Barry said after the release of the travel agent’s full-year profits. “They’re still a valued partner, but this does have a significant impact.”
The news sent Webjet shares skittering. They were down 11.2 per cent to 44 cents as of 11.56am AEST.
If the airline had already cut its commissions in fiscal year 2025/26, it would have cost Webjet $3 million in revenue, the company said.
Virgin confirmed the commissions cut, saying it “regularly reviews its commercial arrangements to ensure we remain competitive and continue delivering value for our customers in a highly dynamic aviation market.”
The airline’s move comes at a difficult time for Webjet. Underlying pretax earnings fell to $28.1 million in the 12 months to March 31, down from $35 million in the previous year, due to “a challenging macro environment and softer trading conditions”, the company said in a statement to the ASX.
“Look, it was a tough year, and with softer trading than expected in patches,” Barry said, with the Iran war and the resulting oil price shock having a marked effect on holiday bookings.
“We continue to see leisure travel in Australia constrained by elevated airfares and low consumer confidence and leisure travel internationally flowing towards shorter-haul Asia and Pacific destinations,” she said. “The macro environment remains really challenging, and we’ve had some internal challenges as well.”
Across the entire group – which also including its Trip Ninja and business travel units – bookings were down to 1.4 million in 2026 from 1.5 million the previous year. The total transaction value slipped to $1.46 billion from $1.5 billion.
Within its online travel agency sector, revenue was flat at $115.3 million, essentially unchanged from the previous year.
Domestic flight bookings were down 10 per cent, “impacted by elevated fares and pressures”, while international flight bookings rose 1 per cent, “with growth skewed to short-haul”, the airline said.
Jun Bei Liu of Ten Cap funds management said it’s “clearly a very challenging period for companies like Webjet.”
The travel agent was being squeezed by Virgin’s commission hit as well as its reliance on domestic travel, she noted.
“People are not flying as much (and) corporates are probably a little bit tighter in terms of spending,” she said.
Webjet, one of the pioneers of online travel agencies, has now seen its shares fall by more than 50 per cent this year on concerns for its outlook.
The company has been at the centre of speculation both over its leadership and future ownership.
Less than two years in the role, Barry in March said she would resign after announcing the full-year result, as suitors continued to circle the company as a takeover target.
Corporate raider Gary Weiss’ investment company Ariadne Australia and private equity firm BGH Capital had teamed up to vie for control of Webjet, bidding against a rival takeover offer from Helloworld.
Webjet in February knocked back offers from both groups, sending its shares diving. Ariadne and BGH have since backed away from any combined plans for ownership and dissolved their partnership.
Weiss was appointed to the board of Webjet at the start of May. Last week, it was announced Weiss would become interim chairman, stoking speculation he could eventually mount another takeover bid.
The travel industry itself is dealing with the fallout of continued disruption by new marketing technology and shifts in consumer preference.
While Webjet pioneered the online travel agency model in Australia, it has risked being outmoded by larger competitors with more scale such as Flight Centre, or the airlines themselves as they’re marketing their flight and holiday deals.
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