Jetset grounded as travel demand wanes
Jetset Travelworld, which is partly owned by Qantas, has warned that it has suffered from a softening in demand for travel in what is traditionally its busiest trading period.
The travel retailer, whose brands include Harvey World Travel and Qantas Business Travel, also indicated it might be forced to write down the carrying value of some of its assets if trading conditions do not improve over the next two months.
Jetset said in a statement to the ASX today that it was "reviewing all aspects of its business" in light of the tougher trading conditions. The company, which is led by former Stella chief executive Peter Lacaze, highlighted that continued losses from its travel management business were worse than expected.
Shares in the tightly held company dropped 2 cents to 50 cents today following the warning, taking its fall since the start of the year to almost 44 per cent. Qantas is the largest shareholder in Jetset with a 29 per cent stake, while CVC Asia Pacific and UBS have holdings of 27 per cent and 18 per cent respectively.
Jetset had expected trading conditions in March and April to be stronger than the same period last year but it said it had experienced a "softening in consumer demand in what is traditionally a strong trading period".
Although the number of transactions had increased year-on-year in both domestic and outbound air travel, Jetset said the value of outbound sales was less due to weaker selling prices for international air tickets.
The company has a big exposure to outbound travel, and it said its total transaction value – the price at which travel products and services are sold – was below expectations for the period.
It has not given earnings guidance for this financial year.
In February, Jetset reported an after-tax profit of $11 million for the six months to December, compared with a profit of $1.3 million.Jetset became one Australia's largest travel company by market value almost two years ago when it merged with the CVC Asia Pacific-owned Stella Travel Services.