Australia's online travel market is undergoing momentous change as the cost of living bites and more customers use artificial intelligence to make their itinerary.
But one agency, which has been hit with a triple whammy of millions of dollars in potential lost revenue, lacklustre bookings and leadership changes at a sensitive time, believes it can recover.
"This is placing significant pressure on our industry, but travel is like water," outgoing Webjet chief executive Katrina Barry said on Wednesday.
"It finds a way."
The potential takeover target stands to lose millions of dollars in annual revenue after Virgin Australia revealed plans to set up its own online travel package offering, thereby reducing its commissions.
The decision left Ms Barry disappointed, although she said the carrier remained a "valued partner" through other commercial agreements, ahead of the change taking effect on July 1.
If Virgin's decision had taken effect during Webjet's 2026 fiscal year, it would have stripped $3 million in underlying revenue - a figure that could still "fall through" to its 2027 results.
"This does have a significant impact on our future commercials," Ms Barry told an earnings briefing.
Webjet shares slumped by 14.3 per cent before recovering to 44 cents, down 10.2 per cent, in afternoon trading.
Webjet, which mainly serves the Australian and New Zealand markets, provides digital platforms for consumers to plan and book flights, hotels, holiday packages, and car hires.
It posted a $3.5 million bottom-line net profit attributable to investors for the year ended March 31, up from a downwardly revised $2 million in 2025.
Underlying earnings before interest, tax, depreciation and amortisation came to $28.1 million, down 20 per cent, on barely higher revenue of $136.4 million.
Total bookings for the year were already down before the Virgin news, with its domestic market off by 10 per cent.
"That's really very much reflecting the cost of living pressures and the elevated fares (being charged by airlines), which impact our mass market mortgage belt customers," Ms Barry said.
"International bookings are up (by one per cent) and that growth is now slightly skewed to short haul destinations in recent months, particularly around Asia Pacific destinations."
During its 2026 full year, Webjet launched predictive AI tools across flight searches to help it anticipate pricing and adjust prices to draw in customers, Ms Barry said.
"This is delivering real competitive pricing for our customers," she said, adding Webjet was one of the first online travel agencies in Australia to launch a ChatGPT app.
But there's no denying the impact of AI on the industry, although Ms Barry sees it more as enhancing customer experiences rather than replacing agents.
"Google has been the source of eyeballs for so many years," she said.
"Now it's shifting to AI.
"We need to know how to play smart in both and be wherever our customers are."
What the sector learned from COVID-19, which is in line with Webjet's research, is travel is not discretionary and demand bounces back.
"And it will bounce back strong and, most importantly, we are doing the right things now to ensure that we're set up for that," Ms Barry said.
Virgin, meanwhile, believes it's on the right track with its revival of Virgin Australia Holidays, which was shut down during the COVID-19 pandemic in 2020, on travel marketplace Hopper.
It cited commissioned YouGov research showing 75 per cent of travellers are more likely to book a holiday through their airline.
Ms Barry is leaving Webjet soon after two years as group leader, following online head David Galt who left in March and chairman Don Clarke, who retires on Wednesday.
