Webjet demerger to unlock robust growth agenda after years of neglect, says CEO Katrina Barry

The boss of the newly split Webjet says the company has control of its destiny for the first time in several years as it looks to take advantage of cheaper airfares.

Webjet Group chief executive Katrina Barry says the demerger of the online travel agency from its business-to-business assets will allow the firm to unleash its full potential, as its shares tumbled almost 20 per cent on debut.

Shareholders last week voted to split the company with the old Webjet renamed WEB Travel, which controls WebBeds and B2B travel distribution assets, while Ms Barry heads up the newly created Webjet, which oversees consumer products including Webjet OTA, global motorhome and car rental site GoSee and Trip Ninja.

Ms Barry told The Australian the demerger would allow the consumer division to control its own destiny and implement a robust growth agenda after having been neglected in recent years amid increased competition for resources from other assets such as WebBeds.

“This business has been the cash cow of the entire group,” she said. “It has funded the development of a $3.2bn business, but we haven’t focused on this business for seven years as we’ve been talking about WebBeds.

“The demerger will unleash its full potential. We’ll have undivided attention, undivided board attention, our own balance sheet and no debt.

“This gives us an improved ability to pursue our priorities and our growth agenda.”

Webjet Group chief executive Katrina Barry with ASX group executive for listings Blair Beaton.

Monday was the first day that Webjet Group commenced trading on the ASX on a conditional and deferred settlement basis before normal settlement trading commences from October 1.

But it was a rocky start for the group as shares fell 19.6 per cent from 99.5c to 80c. WEB Travel fell 88c to $7.35.

Webjet plans to restore dividends from the 2026 financial year once it has built up enough franking credits. Ms Barry said the business was more simplified and focused having been armed with a strong balance sheet.

“The investors we spoke to at our roadshow were impressed with the quality of the earnings, the quality of the organic growth story that we are pursuing, and excited by the upside,” she said.

The newly minted company plan to undertake a brand refresh to ensure that it is modern, contemporary and relevant, having already rebranded its airport rentals and Motorhome Republic divisions.

Ms Barry said Webjet’s main priority would be to grow its reach in the lucrative international outbound market, which offered higher margins than domestic and Trans Tasman options as more airfares continued to fall under increased competition.

“Our share of the international outbound market was 15 per cent sales pre-Covid, but that made up 45 per cent of our revenue,” she said. “One international booking at Webjet is worth 2.5 times revenue to us than a domestic one. Now that was pre Covid, that will have lifted, and the key focus of the business, and that is where we’ll be wanting to grow even further.

“Now is the perfect time to grow that with international air capacity returning to 2019 levels, which is increasing price deflation and competitive pricing after zero price sensitivity on air prices internationally the last couple of years.”

Webjet will look target international travel as the cost of flying overseas begins to get cheaper.

Webjet cautioned last month that online travel bookings were down because of cost-of-living pressures, with bookings at its online travel agency business down 5 per cent this fiscal year and TTV lower by about 10 per cent.

The figures were much less than the 4.7 per cent growth in bookings for the first half forecast by markets and 0.5 per cent in TTV. Webjet’s financial year runs from April 1 to March 31.

Ms Barry said the pandemic and the inability to travel had resulted in people viewing travelling as non discretionary instead of discretionary, despite cost-of-living pressures affecting many household budgets.

“We’re seeing more people have a greater appreciation and a seize-the-day mindset around travelling,” she said.

“People are looking for greater choice and greater convenience, and they want deals. That is one of our value propositions we offer consumers, particularly our mix and match matrix, which allows you to fly the cheapest airline either direction on the same booking even if they are not part of the same alliance.”

Ms Barry was a non-executive director at Webjet since late 2022 and worked at The Travel Corporation as a managing director Contiki and Trafalgar Tours.