Webjet welcomes Virgin Australia as low-cost carrier

Online travel agency Webjet welcomed the possibility of Virgin becoming a low-cost carrier at its annual general meeting.

Webjet chief executive John Guscic: ‘We love low-cost carriers because they offer low-cost fares and stimulate travel, it is just good business for us.’ Picture: Tim Carrafa

Online travel agency Webjet welcomed the possibility of Virgin becoming a low-cost carrier at its annual general meeting on Thursday night.

“We love low-cost carriers because they offer low-cost fares and stimulate travel, it is just good business for us, so bring it on,” Webjet managing director John Guscic told shareholders.

“The travel recovery will be domestic driven in the leisure markets,” he said.

“The demand for travel will grow and leisure spend will increase.

“The travel markets have been disrupted substantially and it’s up to us to position ourselves to be appropriately geared for its recovery.

“We see this in New Zealand where the domestic market is going very strong, it was the first to open up.”

Mr Guscic foreshadowed that once Australia’s most popular air routes between Sydney, Melbourne and Brisbane restarted Webjet would be back in the black.

“As soon as the Sydney to Melbourne route is open we will be profitable,” he said.

“(With) the two largest travel corridors in Australia, once they reopen ... we would be in a scenario where Webjet would be making material returns for our shareholders.”

The reopening of more domestic borders would also help the online travel agency return to profit.

As Webjet gears up for the post-COVID realm Mr Guscic said its Webbeds business would focus on increasing the quality of its hotel offerings in the Asia Pacific.

He did not rule out the possibility of further acquisitions but Webjet chairman Roger Sharp said there was nothing on the table at present.

“We continue to see consolidation and we have seen a lot of smaller businesses have gone out of business,” Mr Guscic said.

“We believe our strength provides us with the ability to take advantage of these significant opportunities.”

Mr Guscic said he was focused on lowering company costs and has reduced cash burn to $6m a month.

Mr Sharp refused to discuss future dividend payments saying “it was off the table”.

“We are not considering dividends at this point,” Mr Sharp said.

Given Webjet’s $346m raising in April followed by a $163m notes offering, Mr Sharp said Webjet had entered the financial year in a strong financial position with adequate cash reserves for at least two years of difficult trading.

Asked by the Australian Shareholders Association to comment on the short selling of Webjet stock Mr Sharp said: “We have nothing to say to short sellers, it’s none of our business.”