Delayed, Not Cancelled: FLT and HLO: Resetting into year end

Research evidence excerpt

Delayed, Not Cancelled: FLT and HLO: Resetting into year end

J P M O R G A N Asia Pacific Equity Research

18 June 2026

Delayed, Not Cancelled

FLT and HLO: Resetting into year end

Attention now turns towards the shape of the recovery for FY27. A recovery in AU Australia

demand will not be immediate and in full, but should be accelerated by: 1) Middle

Emerging Companies

East carrier capacity coming back, 2) carrier campaigns deals/incentives

(discounts, etc.), 3) the downgrade of DFAT’s Travel Warning to the Middle East Don Carducci AC

(here, discussion below) and 4) improving consumer confidence. Headline (61-2) 9003-8379

donald.n.carducci@jpmorgan.com

multiples have moderated for HLO and FLT; looking beyond the near term, we AC George Stewart

believe both businesses are well placed to capture a normalisation in demand. (61-2) 9003-8199

• Shape of the demand recovery/yield considerations: HLO expects leisure george.stewart@jpmorgan.com Laura S Hill demand to recover within a 60-90 day window following the resolution of the

(61-2) 9003-8258

conflict. Lowered Department of Foreign Affairs and Trade (DFAT) travel laura.s.hill@jpmorgan.com

advice for the ME (from Level 4: ‘Do Not Travel’) supports a steady demand J.P. Morgan Securities Australia Limited

recovery (previously a material constraint to bookings). On yield, the expected

mix shift back towards high-yielding ME carrier deals supports a margin

recovery for both FLT/HLO through FY27.

• FLT 4Q disruption drives guidance downgrade: Group UPBT guidance cut

to A$275m-A$295m (from A$310m-A$345m), reflecting a ~A$50m leisure

UPBT hit as customers defer/re-route their travel, plus ~A$5m UK touring

impact and A$5m-A$10m FX translation headwind; corporate less affected

but higher airfares may pressure FY27 TTV.