Webjet (ASX:WJL) is starting fiscal year 2027 poorly, as earnings come under pressure from subdued demand and lower commissions from airline Virgin Australia, Jefferies said in a note on Wednesday.

The company posted fiscal year 2026 underlying EBITDA in line with consensus, but a 2% beat in revenue expectations was offset by a 9% miss in underlying net profit after tax (NPAT) due to higher non-cash expenses and lower net interest.

The investment firm said fiscal year 2027 trading to May 17 appears weak, with online travel bookings down about 15%, primarily hurt by cost-of-living pressures, elevated airfares, and travelers opting for short-haul trips to Asia rather than international travel.

An upcoming ban on card surcharges by the central bank also poses a "difficult-to-offset earnings risk" due to limited pricing power.

"While growth in Business Travel and ancillary revenue is encouraging, these are not yet large enough to offset core weakness," analysts at the brokerage said.

Jefferies has a hold rating on Webjet with a price target of AU$0.65.