Australian travel portal Webjet posts a leap in sales

Webjet, the internet-based travel portal located in Australia, has posted a 19 % increase in the number of people using its services in the second half of 2008.

David Clarke, managing director of Webjet, said in a press release that the travel portal achieved the growth “despite economic gloom and the falling Australian dollar which prompted fears of a slowdown in air travel.”

Webjet Limited, established in 1998, operates one of Australia’s most popular online travel booking websites (webjet.com.au) on-selling air fares, hotel bookings, car hires and travel packages. It has been listed on the Australian Stock Exchange since March 2000.

“Webjet’s jump in transaction numbers,” David Clarke added, “contrasts with an estimated 5% decline across the sector and follows the announcement a fortnight ago by travel agent Flight Centre that it expects pre-tax profit for the half to fall as much as 11% compared with a year earlier.”

Clarke attributed Webjet’s results to “increasingly budget-conscious travellers using the company’s portal, which compares prices across different airlines, to drive their dollar further” and added: “We have got a general economic environment where people are really hunting the bargains. To do that on individual airline websites or within a bricks-and-mortar travel agent is very difficult, but very easy on the net.”

Webjet claims to offer consumers “easily comparable, all-inclusive” prices for competing airlines, and generates revenue by charging user’s a fee.

For the half-year to December 2008, the total value of Webjet’s transactions rose to about $180 million – up by 14% compared to the $158 million achieved a year earlier.

Webjet said that, in the 2008 financial year, it earned $330 million in sales and a post-tax profit of $9.4 million.

“The travel industry,” the Webjet press release said, “has been buffeted by a downturn in consumer spending, but declines have been cushioned by drops in aviation fuel prices, the benefits of which have been passed on by most airlines. In an effort to grow market share, Webjet launched its year-end promotional campaign late last month rather than in the third week of January, as in previous years. The company splits its $7 million advertising budget – about 2% of turnover – evenly between online promotions and traditional advertising.”

Webjet’s managing director David Clarke was quoted by the Australian newspaper Sydney Morning Herald as saying that the performance of the airline sector in 2009 “would be determined by the extent of the rise in unemployment and the degree to which airlines continued the heavy discounting of recent months.”

While Clarke predicted that the discounting would remain strong for the first half of 2009, he said the situation beyond June 2009 was less certain. “We may see either a continuation of major bargains, or we may see airlines seriously rationalising capacity.”