Flight Centre announces 1H24 profit increase of 565% as corporate travel remains strong

Melbourne, Australia: April 12, 2018: Street view of a Flight Centre shop window. Flight Centre is Australia’s largest travel agency selling international flights, holidays and tours. A man walks past.
Edited by Travel Weekly

    Flight Centre Travel Group has announced an  AUD$106million underlying profit before tax (PBT) for the half year to December 31, 2023.

    The leisure business’s AUD$60million underlying PBT exceeded pre-pandemic levels and was:

    • Circa 30-times the AUD$2million FY23 first half (1H) result.
    • Double the AUD$30million FY19 1H underlying PBT.

    Underlying corporate PBT increased 53 per cent to AUD$93million, during another period of healthy,  organic growth and ahead of the Productive Operations initiative’s benefits being realised.

    Total transaction value (TTV) increased 15 per cent to AUD$11.3billion, delivering FCTG’s second strongest start to a year (behind only the FY20 1H) while Corporate TTV increased 16.8 per cent to a record AUD$5.9billion, the business again achieved new sales milestones and comfortably outpaced the broader corporate travel sector’s recovery.

    Leisure TTV increased 18 per cent to AUD$5.2billion, with scale benefits being achieved across a diverse mass market, luxury, complementary and independent brand range.

    “Travel continues to be a critical facet for corporates across Australia and New Zealand with several new business wins contributing to a solid first half to the financial year, as revealed in Flight Centre Travel Group’s (ASX:FLT) mid-year results announcement,” MD (AU/NZ), Flight Centre Corporate, Melissa Elf, said.

    “The volume of travellers across Flight Centre Corporate increased by 21 per cent in H1 FY24, compared to H1 FY23, across all businesses (FCM Travel, Corporate Traveller, and Stage and Screen).

    “We’ve made a conscious commitment to consistency in productive operations, delivering a blend of touch and tech, in response to what corporate travellers are seeking, and this is driving significant new business wins for us across the corporate arm.

    “According to the Global Business Travel Association, international business travel spending will reach $1.5 trillion in 2024, which is up from the pre-pandemic peak of $1.4 trillion.

    “The numbers speak volumes – corporate travel is back for many and it’s a booming industry, that’s buoyed by the growing trend of ‘bleisure’ travel, in which business travellers are tacking personal time on their end of their work trips.

    “We’re predicting a strong year ahead, with the culmination of decreasing domestic and international airfares, improving competition and capacity from airlines, fleet reconfigurations to streamline airline operations, and our continued investment into productive operations and technology.

    “Although the industry still has some way to go in terms of recovery internationally, we’re very optimistic about growth opportunities as we enter the second half, particularly as economic confidence returns, and with meetings, events, and conferences remaining a priority to business.”

    Chris Galanty, global corporate CEO, Flight Centre Travel Group, revealed that corporate business has contributed 52 per cent of the groups total transaction value among other highlights.

    “We’ve also achieved new milestones in the four geographic regions of Australia and New Zealand, the Americas, Europe, and Middle East and Africa and Asia,” he, said.

    “These record results, built on high customer retention rates and large volumes of new account wins, were achieved in a sector that has only recovered to circa 70 per cent of pre-COVID transaction volume levels, pointing to our healthy market-share growth.

    “At the end of January 2024, our corporate brands had secured new accounts with projected annual spends of circa $1.3billion, with FCM Travel typically winning customers from competitors, and Corporate Traveller securing a mix of unmanaged and smaller, managed accounts.

    “We continue to make strides in the technology space with mass adoption of our Corporate Traveller Melon platform in the USA and Canada – with fast growth also being seen in the UK. FCM Platform has also seen successful growth with all existing customers anticipated to be migrated this year.

    “We’re also progressing our corporate AI Centre of Excellence and that has seen new features added to the suite of products already available that have improved the customer experience and increased our operational productivity.

    “Aside from technology, we’ve also been working tirelessly towards clear and consistent strategies that have been successfully executed globally, with these strategies initially focusing on ‘Grow to Win’, but now also include productive operations.

    “We look forward to continuing this momentum into H2 of FY24 – with more exciting advancements
    to come later in the year – and some major customers to be onboarded globally.”

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