FLIGHT CENTRE PROFIT TAKES OFF
GLOBAL travel retailer Flight Centre has returned to profit in the first four months of the 2023 financial year, despite high airfares and a lack of capacity constraining the travel recovery.
Addressing the company’s annual general meeting, chief executive Graham “Skroo” Turner said total transaction value had improved 246 per cent to $6.8bn in the four months to October 31, compared with the previous corresponding period.
Revenue was up a similar level to $667m with Flight Centre recorded an underlying $61m profit for the period, up from a $137m loss in the first four months of the previous financial year.
For the half year, a profit of between $70m and $90m was forecast, below previous expectations of $97m.
This pushed Flight Centre shares 3.76 per cent lower to $16.37. Mr Turner said the figures were encouraging, particularly given the recovery was still in its early stages.
“There is considerable pent-up demand that is not yet fully translating to bookings, which means there is also ongoing upside potential,” he said.
“In business travel for example, our recovery is being driven by very high customer retention rates and large volumes of new account wins — rather than by overall client activity returning to pre-Covid levels.”
Leisure travel out of Australia remained well below 2019 levels due to “a lack of competition and capacity leading to a lack of seats to sell and abnormally high airfare prices”, Mr Turner said.
“Our expectations for the 2023 financial year are unchanged — we believe this will be a year of gradual recovery for the industry overall ahead of a larger scale recovery during the 2024 financial year.”
Mr Turner noted that higher inflation and interest rate hikes were yet to noticeably impact demand for travel.
He also urged people still holding travel credits to consider their options before they expired, with some suppliers setting a yearend deadline for use.