Bright future ahead despite $377.8m loss, says Flight Centre MD

Flight Centre has recorded a “modest” second-half profit to finish FY22 despite a before-tax loss of $377.8 million for FY22.

The travel agency released its full-year results this morning, revealing TTV and revenue increased 162 per cent to $10.3 billion and 154 per cent to $1 billion respectively over the full year.

The company’s loss before income tax for FY22 was listed as $377.8 million, showing a huge improvement on FY21’s $601.7 million loss and FY20’s $848.6 million loss.

Flight Centre has started the new fiscal year with solid momentum after a strong finish to FY22, with TTV recovery accelerating during the fourth quarter, recording a $35 million underlying profit for the period.

The fourth quarter uplift led to a modest second-half profit, according to the company, marking a significant turn-around from both the underlying EBITDA $184 million loss recorded during the first half, while heavy restrictions remained in place globally and the $182.2 million loss recorded during the FY21 second half.

The loss was a 46 per cent improvement on the EBITDA $337.8 million FY 21 result and fell within the company’s updated guidance range.

All geographic regions and business segments, apart from Asia, returned a profit in the fourth quarter, with global corporate and Europe, Middle East and Africa (EMEA) businesses profitable for the year.

The corporate business out-performed with key sales metrics all outpacing the broader business travel sector’s recovery, with gross corporate TTV for June 2022 exceeding pre-COVID levels six months earlier than anticipated as a result of increased volumes and higher airfare prices.

Flight Centre’s global leisure business also recovered strongly during the second half and delivered a fourth-quarter profit in the order of $10 million, including losses from the in-destination businesses.

The company has continued to target experienced travel agents who were displaced during the pandemic to help cater to a huge increase in demand which is said is fuelling the “renaissance of the travel advisor”.

As a result, it’s now attracting 4,500 applicants per month in Australia alone.

“After two years of unprecedented disruption to normal global travel patterns and other everyday activities, we are pleased to start FY23 with a considerably brighter outlook,” said Flight Centre CEO Graham “Skroo” Turner.

“Travel demand has recovered rapidly since most governments globally have removed or relaxed border restrictions and we have started the new fiscal year with strong momentum.

However, it’s still early days in the recovery, according to Turner, and there is still considerable upside potential.

Turner noted in particular Australia’s outbound passenger departures tracked at just 35 per cent of pre-COVID levels over the FY22 second half, peaking at 60 per cent in June.

“There has also been some ongoing supply constraints and macro-economic uncertainty, although these factors do not seem to be slowing the recovery at this stage,” he continued.

“While the cost of living is generally increasing, very low unemployment globally and travel’s proven resilience are significant offsetting factors for our business, with customers having both means and the desire to make the most of their limited vacation time after being denied the opportunity for some two years.”

Flight Centre also took the opportunity this morning to announce a new addition to its board with the appointment of Kirsty Rankin as a non-executive director.

The company’s board now consists of chairman Gary Smith, MD Graham “Skroo” Turner and non-executive directors Colette Garnsey, Kristy Rankin, John Eales and Rob Baker.

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financial results flight centre FY22 Graham 'Skroo' Turner skroo