Cheaper flights fuel Flight Centre sales

Cheaper flights fuel Flight Centre sales
By Anne Majumdar


Cheaper airfares and increased airline capacity on international routes will help offset subdued consumer confidence in Australia, Flight Centre says.

The country’s largest travel agency is targeting another record profit result after making a solid start to the new financial year.

Shareholders at its annual general meeting on Wednesday were told the Flight Centre is aiming to lift pre-tax profit between four and eight per cent above the $366.3 million achieved in 2014/15.

Chief executive Graham Turner says consumer confidence remains fairly subdued in Australia and the outbound travel market is growing at a slower rate than normal.

However, customer inquiries were solid largely due to cheap international airfares.

“Eight of the 10 fares that we are advertising on the flightcentre.com.au landing page this week are cheaper than the fares we advertised 12 months ago,” he said.

“The average saving across these 10 headline fares is 10.6 per cent.”

Mr Turner said airline capacity also continued to increase on international routes and competition between the airlines was healthy.

The weaker Australian dollar also hasn’t turned Aussies away from America, with short-term departures to the United States surging, he added.

Mr Turner said the company had performed in line with expectations during the first four months of 2015/16, with its UK and South African businesses among the top performers.

He said the Canadian business had undergone a management shakeup and losses were easing.

Flight Centre is open to more acquisitions with a particular interest in youth focused travel businesses.

Shares in Flight Centre were trading 36 cents higher at $37.14 at 1105 AEDT.

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