From the managing editor

THERE’S no doubt the Australian travel industry is going through a quiet period. A plethora of high season not-so-early earlybird offers, tactical deals and creatively packaged product is evidence of a soft market, while both Qantas and Virgin Australia have both issued updates confirming their forward bookings are slower than expected, each citing a dip in consumer confidence in part due to the uncertainty relating to next month’s Federal election. It is cold comfort, but some will be reassured by indicators that the downturn appears to be right across the market. Even the seemingly unstoppable Flight Centre cited a “challenging trading climate that has impacted short-term results” at an investor conference in May. Industry observers have noted a change in Flight Centre’s rhetoric, with the company for the first time in memory saying its targeted net profit growth of 4-8% was “not a formality” due to uncertain trading conditions and investments made to drive longer-term returns. The respected John O’shea, travel and tourism analyst with Bell Potter Securities, has raised the issue of Flight Centre’s shop network, which while the biggest contributor to group earnings also has a relatively high fixed cost base. His analysis indicates that the traditional Flight Centre branded stores in Australia “appear to be delivering negative like-for-like TTV growth”. Helloworld is still basking in the afterglow of its merger with the AOT Group about four months ago, with new CEO Andrew Burnes undertaking significant restructuring which should improve the bottom line. There’s still lots of work to do, and a soft trading environment certainly won’t be helping, but Burnes flagged an increase in TTV to between $5.3 billion and $5.4 billion in the next financial year due to the AOT merger and improved trading conditions within QBT. Nevertheless at the recent Helloworld for Business (HFB) conference in Singapore, Helloworld head of associate networks David Padman revealed the HFB division had grown by nine new members to a total of 73 agencies over the last year – an increase of over 10% – while at the same time “in a pretty tough year we have grown our turnover year on year by 2%”. So if business seems to be slow, you’re not alone. The good news is that the fundamentals are still good. Outbound departures continue their relentless rise and O’shea said he “remains confident the current slowdown is likely to prove transitory”.