Flight Centre recovery beats expectations

Flight Centre recovery beats expectations

Flight Centre recovery beats expectations

Flight Centre Travel Group says it has bounced back to monthly profitability sooner than expected, although COVID-19 travel restrictions prior to February mean it will report a full-year loss of between $180 million and $190 million.

The midpoint of that range is a 11.9 per cent improvement on its guidance, and far better than the $337.9 million loss Flight Centre reported for fiscal 2021.

The company said unaudited financial results indicate it broke even during the second half and made a “healthy” fourth-quarter profit.

“Although fares are up, we’re slowly but surely getting back to pre-COVID TTV (total transaction value),” managing director Graham Turner said.

Flight Centre handled $10 billion in transactions in fiscal 2022, more than two-and-a-half times the $3.95 billion it managed the year before in the depths of pandemic restrictions.

“Partly, it is the higher airfares, but generally we’ll be back to, or over, pre-COVID levels over the next six months in overall total revenue,” Mr Turner told AAP.

“But there’s still that capacity issue, in Australia in particular.”

Mr Turner said so far corporate travel had come back back more strongly than leisure travel.

Flight Centre’s revenue from corporate travel is at about 90 to 95 per cent of pre-COVID levels, while revenue from leisure travel is around 60 to 65 per cent, he said.

“It’s lagging a little bit. Obviously, the higher airfares are contributing.”

The company had to stand down two-thirds of its employees as the pandemic bit, going from a global workforce of between 21,000 and 22,000 to about 7000, Mr Turner said.

“We’re back up to about 11,000 to 12,000, so we’re getting back,” he said.

“We still need significantly more people, we probably need another two, two-and-a-half thousand people at the moment, which we’re recruiting quite successfully, but they need training so it’s not an immediate solution.”

About 45 per cent of that workforce is in Australia, Mr Turner said.

“Generally, the industry’s on the comeback track, and it’ll just slowly but surely improve over the next six to 12 months. We’re reasonably happy with the progress.

“It’s not going to be an overnight – it’s going to be bumpy, over the next six to 12 months, due to the capacity, fuel.

“The Ukrainian war won’t help, and COVID waves will come and go probably, so there’s still a few things to think about, but we’re happy.”

At 1130 AEST, Flight Centre shares were up 5.6 per cent to a one-month high of $18.07.

The company will release audited financial results on August 25.

Derek Rose
(Australian Associated Press)