High dollar has little impact: FC

High dollar has little impact: FC
By admin


Some flights are cheaper now than during the Global Financial Crisis, according to Flight Centre, with discounting that has been common place in economy now reaching business class cabins.

In a presentation at the Macquarie Australia conference, chief financial officer Andrew Flannery said advertised fares to Bangkok, Auckland, Paris and Rome remain “below GFC levels”.

While price trends vary from route to route, fares are cheaper than 12 months ago with new entrants “growing capacity and offering attractive fares”.

“International airfares remain highly affordable,” he said.

The comments come amid concern within Jetset Travelworld that cheap deals are undermining the financial performance of the business.

Flight Centre also told the conference that the US dollar “is irrelevant to the overwhelming majority of outbound travellers” with cheap airfares and consumer confidence the primary drivers of demand.

“The strong dollar is typically a secondary benefit for travellers,” the retailer said.

Furthermore, there is no direct correlation between its financial performance and a high Australian dollar with profits continuing to rise even despite foreign exchange fluctuations.

In terms of travel enquiries in Australia, “shops are as busy as they have ever been”, Flight Centre said.

Meanwhile, the retailer reiterated its pre-tax profit guidance in 2012 of between $270 million and $290 million, a rise of 10% to 18%.

Leisure and corporate results have both improved this year with corporate leading the way. It now accounts for 30% to 35% of total transactional value.

Corporate travel remains “an obvious growth opportunity”, it said.

“FLT is already the largest player in Australia but market share lags behind leisure travel share,” the firm said in its presentation.

Email the Travel Weekly team at traveldesk@travelweekly.com.au

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