Helloworld Travel Cuts FY26 Profit Guidance but Still Eyes Year-on-Year Growth
Helloworld Travel revises FY26 EBITDA guidance to $57–$62 million as Middle East conflict disrupts air travel
Helloworld Travel Limited (ASX: HLO) has updated its FY26 Underlying EBITDA guidance range to $57–$62 million, down from the prior range of $64–$72 million first issued on 23 October 2025 and reaffirmed on 25 February 2026. The revision is directly attributed to the Middle East conflict’s disruption to airline capacity and forward bookings, not any structural deterioration in the business. Critically, even the revised range sits above the FY25 actual of $55.6 million, providing investors with a meaningful anchor point.
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What the Middle East conflict has meant for bookings
The disruption has followed a clear chain. International flights from Australia on the three major Middle Eastern carriers (Emirates, Qatar and Etihad) collapsed from 150 per week to nil in March, recovering to approximately 82 per week at present. This capacity withdrawal triggered significant cancellations and re-bookings among customers travelling to the UK and Europe via Dubai, Doha and Abu Dhabi.
The impact on forward air sales has been stark. Prior to conflict escalation, HLO’s Q4 FY26 air sales were tracking at approximately 29% above the prior corresponding period (pcp) in Australia and approximately 16% above pcp in New Zealand. Those figures have since swung to approximately 4% below pcp for both markets. Compounding the revenue impact, the carrier mix shifted away from high-yielding Middle Eastern carrier partners toward lower-yielding Asian carrier partners, compressing override income in Q4. Higher jet fuel prices have added a secondary layer of pressure by dampening demand for new bookings.
The table below illustrates the directional shift in key metrics. These figures are indicative tracking data, not audited results.
| Metric | Pre-Conflict Tracking | Current Q4 FY26 Tracking |
|---|---|---|
| Australia air sales vs pcp | ~+29% | ~-4% |
| NZ air sales vs pcp | ~+16% | ~-4% |
| Middle East carrier flights/week | 150 | ~82 (nil in March) |
Why the investment case remains intact
Understanding override income and why carrier mix matters
Travel distributors such as HLO earn “override income,” which refers to volume-based bonuses paid by airline partners when certain booking thresholds and yield targets are met. Middle Eastern carriers have historically offered higher override rates than smaller Asian carriers. The current issue is therefore a margin compression problem driven by carrier mix, not a collapse in underlying travel demand.
The structural resilience signals investors should focus on
Several data points from the trading update point to a business holding its quality mix through the disruption:
- Premium cabin sales now represent 53% of air sales in Australia and 50% in New Zealand year-to-date FY26, up from 50% and 46% respectively in the pcp, indicating HLO’s customer base continues to trade up
- Australia’s retail network is now 37% non-air sales (versus 34% pcp), while New Zealand sits at 29% non-air (versus 19% pcp), with higher-yielding categories such as land, cruise, insurance and car hire gaining share
- Forward bookings from July 2026 onwards are tracking above prior year, with visible pipeline recovery already in place
- Management anticipates demand will recover to previous levels within 60–90 days of conflict resolution, based on prior experience with similar disruptions
The dividend signal
HLO anticipates paying an FY26 final dividend similar to the FY26 interim dividend paid in March 2026, subject to finalisation of the FY26 financial statements and Board determination. At HLO’s closing share price of $1.40 on 4 June 2026, this would represent a fully franked yield of approximately 7% per annum. Maintaining a dividend at this level through a disrupted operating environment signals Board confidence in the underlying cash generation capacity of the business.
CEO & Managing Director, Andrew Burnes
“Despite the Middle East conflict, it remains clear that leisure travel demand is very resilient and travel is firmly entrenched as a non-discretionary item in households that make up the majority of Helloworld’s market demographic. People want to travel, they want the services of a travel professional to make sure it is done right, and they want to have the back up of a travel professional if anything goes wrong along the way.”
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What comes next for HLO investors
CEO & Managing Director Andrew Burnes and CFO Mike Smith will host an investor phone call to discuss the trading update on Tuesday, 9 June 2026 at 11:00am AEST. Investors can register via the following link: https://s1.c-conf.com/diamondpass/10055278-s2w6gd.html.
Beyond the call, HLO’s position as WJL’s largest shareholder also warrants attention. The company currently holds 78,250,205 ordinary shares in Webjet Group Limited (ASX: WJL), representing 20.118% of voting power when adjusted for WJL’s share buybacks. Management has confirmed it continues to monitor the performance of the business and assess its options with respect to this investment.
On costs, HLO is actively managing its cost base while maintaining the network capacity required to service its agent and broker networks when demand rebounds. Three forward-looking items stand out for investors monitoring the HLO thesis:
- Resolution of the Middle East conflict remains the primary re-rating catalyst
- Forward bookings from July 2026 onwards are already tracking above prior year, indicating near-term recovery momentum
- The Webjet Group stake represents a potential optionality event that is separate from HLO’s core operating performance
Through the disruption, the revised FY26 Underlying EBITDA guidance of $57–$62 million still represents year-on-year growth over the $55.6 million delivered in FY25.
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