Flight Centre Travel Group reports strong results

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

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

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

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

Total transaction value (TTV) increased 15% to AUD$11.3 billion, delivering FCTG’s second strongest start to a year (behind only the FY20 1H).

Corporate TTV increased 16.8% to a record AUD$5.9 billion, as the business again achieved new sales milestones and comfortably outpaced the broader corporate travel sector’s recovery.

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

Commenting on the results, Chris Lynes, Canada Managing Director, Flight Centre Travel Group, said: “During the first half of the fiscal year 2024, Flight Centre Travel Group experienced significant growth, with our corporate and leisure sectors in Canada driving increased revenues. Notably, Corporate Traveller and Flight Centre have taken the lead, propelling our division to become one of the largest.”

Lynes observed: “We’ve been actively laying groundwork for sustained growth, especially in sectors where we excel, streamlining operations and enriching customer value—our focus is on fully harnessing Canada’s corporate and leisure travel potential.”

He continued: “What’s more, our dedication to innovation this year sparked the establishment of the ‘AI Centre of Excellence.’ This venture is transforming our corporate offerings with artificial intelligence and has strengthened our digital platform, Melon, accelerating growth and enhancing client interactions.”

Said Lynes: “We’re tapping into the rapidly expanding independent leisure travel market—one of our most dynamic sectors in recent years. Our recent launch of our new Envoyage brand highlights the vital contribution we anticipate from our independent travel network to our evolving business model.”

And he concluded: “Forward looking, with our consistent growth and innovative edge, we’re poised to expand our market share across Canada, North America and, indeed beyond.”

Flight Centre Travel Group’s Global Corporate CEO, Chris Galanty said: “Our corporate businesses have had a strong start to H1 of FY24 globally, contributing 52% of Flight Centre Travel Group’s (ASX:FLT) total transaction value, with our proven organic growth model again delivering record overall sales.”

Galanty pointed out: “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.”

And he continued: “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.”

Galanty said: “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.”

He also noted that: “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.”

Galanty added: “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.”

FCTG’s Global Corporate CEO, explained that: “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.”

And he concluded: “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.”