Media Release
Webjet Market Guidance Upgrade
8th April 2008
Webjet today announced an upgrade of its market guidance for the full year to 30 June 2008 following the completion of 9 month results to the end of March and in line with our comments to the market which eventuated from our half year results to 31 December 2007 where we indicated that the January trading results remained strong.
On current indications and subject to the provisos further noted, we provide the following market guidance update.
This upgraded profit guidance to the market is based on our best understanding of the likely trading conditions for the quarter April-May-June 2008. As indicated in our half year release a number of factors remain which cannot be fully quantified at this time. Specific factors which may continue to negatively impact on the demand for travel are:
- Interest rates and mortgage repayment impact on the consumer discretionary dollar
- Bowser petrol prices
- A clear drop in general consumer confidence at a retail purchase level
These potential negatives were highlighted in our half year release and although they have not yet become evident in demand for travel in the quarter ended 31 March, it is unlikely that they will not have some negative impact in the April-May-June quarter.
These negatives are to some degree counterbalanced by the continuing positive macro factors:
- Continued full employment in Australia
- Wage growth (even if slightly inflationary)
- Continued airline competition and capacity increases
We remain of the view that on balance this mix of pluses and minuses will mean that the market will be more price sensitive over the next 6 months than was the case in the preceding 6 months but we also consider that it is likely that competition will continue to intensify at a supply level and that consumers will become more value conscious and that as a result, those values will be sought through airline aggregation sites.
Webjet's current marketing campaign which recommences on Wednesday 9 April on the National Seven Network will take into account this likely concentration on value demand.