Flight Centre posts $434m full-year loss, eyes return to monthly profitability in FY22

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.

Flight Centre Travel Group (FCTG) has recorded a $433.5 million statutory loss after tax for the 12 months to 30 June 2021, but is targeting a return to monthly profitability in FY22.

On a positive note, the full-year loss is less than the $662.2 million hit that the company took in in FY20.

FCTG’s total transaction value (TTV) plummeted 74 per cent to $3.9 billion in FY21, and total revenue dropped 79 per cent to $396 million.

The group’s leisure segment posted a $366 million underlying loss before tax (LBT) over the 12-month period, compared to $528 million in FY20, while the corporate segment swung to a $122 million underlying LBT, compared to a $72 million underlying profit before tax in the previous fiscal year.

FCTG’s Australian and New Zealand posted a $208 million underlying LBT, compared to a $322 million LBT in FY20.

Graham “Skroo” Turner, chief executive of FCTG, noted that while the 2021 financial year was another challenging one for the travel industry, conditions have gradually started to improve.

“When lockdowns have lifted and borders have re-opened – as they have just started to do in a more meaningful way outside of Australia and New Zealand – we have typically seen immediate and strong travel recovery, which is what we have now started to see in key locations like the US, Canada and Europe,” he said.

“The near-term outlook has also improved in the UK, another large and important market for our company, with most restrictions now lifted and people learning to live with the virus.

“As an organisation, we too have learnt a lot during the past 18 months, particularly about being resilient, consistent and as optimistic as possible during tough times.

“Our priorities have evolved from emergency cost-cutting at the beginning of the crisis to maintaining those significantly reduced expenses, while still developing and implementing our technology, improving productivity and finetuning our recovery strategies to drive stronger future returns.”

FCTG supremo Graham “Skroo” Turner

Looking ahead, Turner said FCTG’s diversified global business model with “compelling customer offerings” across the leisure, corporate and supply divisions “will be of enormous value and a great advantage to us and to our major suppliers”.

“Although we can’t predict the future, given the current government-enforced restrictions, we are targeting a return to monthly profitability later in FY22 and to return to pre-COVID TTV by June 2024, but with significantly reduced ongoing operating costs,” he said.

“Travel will inevitably be more complex in the post-COVID world and customers will require more assistance as they navigate new requirements and try to understand any restrictions that may still apply.

“In this type of environment, our people’s knowledge and our enhanced systems will prove invaluable at every step of the customer journey.”

FCTG opted not to provide any form of guidance for FY22 due to the “lack of clarity around government timeframes for border re-openings and removal of other travel restrictions”.

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