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HALF YEAR RESULTS TO 31 DECEMBER 2009

• NPAT up 40%
• NPBT up 45%
• TTV up 37%
• INTERIM DIVIDEND UP 67% TO 5c (LAST YEAR 3c)

Webjet today announced the following results for the six months ended 31 December 2009:

Commenting Webjet MD said: Webjet is delighted to announce a 40% increase in net profit after tax.

Webjet 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% and total transaction values up 37% thus indicating an increasing economy of scale.

Dividend

The interim dividend has been increased from three cents fully franked (2.5c plus 0.5 special last year) to five cents ordinary dividend fully franked payable on 14 April.

This represents a pay out ratio of 72%. This is in line with previous market advice that it is our intention, subject to appropriate trading conditions, to move to a payout ratio of approximately 80%.

Operational results for the half year to December 2009 by main indicator.

• Strong TTV growth of 37% substantially exceeded general market conditions and demonstrates a continuing substantial gain in market share in an industry which has reported variously negative growth for the period to small single digit growth numbers. Webjet has substantially outperformed the market including all available major airline traffic statistics.
  
  In this same period where some industry competitors moved to a so called zero fee policy, Webjet has maintained its appropriate fees and margins and continued to gain market share which demonstrates the total value offering is superior to all competitors.
• Operating margins of 7.1% (excluding interest) are precisely in line with the same period last year with pre-interest dollar value earnings increasing to $17.6 million from $12.9 million, an increase of 37%.
  
•  Operating costs have increased by only 25% against a TTV increase of 37% as a result of increasing economy of scale after the absorption of a further increase in costs relating to higher service standards and the delivery of our unique seat price guarantee.
  
• Marketing costs of 1.45% of TTV have decreased as a percentage compared to the same period last year from 1.9% despite a substantial increase in marketing footprint and media coverage into regional Australia and represents both economy of scale and special media buying opportunities which we foreshadowed at the full year results. In absolute terms marketing costs increased by 5% against a TTV increase of 37% demonstrating an increasing effectiveness of our marketing activities. Webjet may, depending on market and media opportunities, increase this to the previously advised control percentage of 2% in the January to June period.

Strategy and guidance 2009/2010

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.

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 combination of these components along with a strong Australian dollar allied with customer search activity during the Christmas New Year period suggests that there is the beginning of a demand recovery both internationally and domestically.

Against this background we are cautiously optimistic for the six months to June 2010 and although we are not at this juncture providing formal market guidance we would be disappointed if the profit in this period is not similar to the first half.

As advised to the market at our full year filing Webjet intended a series of significant product releases.

The status of these developments is:

• Budget Breaker has been released to the market and in association with our Deal Finder range of shopping options forms a fundamental component of our marketing strategy for this current half year.
• stay then pay has been released to the market and our media campaign has commenced for this product.
• Our North American operation is on track for commencement 01 April.
• Our investment in Taguchi Marketing Pty Ltd is continuing satisfactorily and Taguchi is producing results either equal to or better than its internal budget.

In addition to these developments we have now entered into a unique online arrangement with American Express (AMEX) which will be released to the market in February this year and enable American Express card point holders to redeem points across all airlines sold by Webjet both in terms of the absolute use of points and a topping up process in cash if the customer prefers.

The full Webjet product range will be shortly released on an iPhone application.

Concurrent with these significant marketing initiatives Webjet continues to invest substantially in quality and customer service including the appointment of a senior executive, Tim Wagg, as General Manager of Customer Operations. Tim has a background of over 25 years in the travel industry including Jetset, Ansett and more recently as Head of Strategy and Planning, Transurban.

This appointment adds another dimension of expertise into delivering top level customer service and underlines our commitment to delivering the best transaction and after transaction service in the industry to our core brand value.