Flight Centre Travel Group Half-Year FY24 Financial Results
Flight Centre Travel Group (ASX:FLT) achieved an AU$106 million underlying profit before tax (PBT) for the half year to December 31, 2023.
The leisure business’s AU$60 million underlying PBT exceeded pre-pandemic levels and was:
• Circa 30-times the AU$2 million FY23 first half (1H) result; and
• Double the AU$30 million FY19 1H underlying PBT.
Underlying corporate PBT increased 53 percent to AU$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 percent to AU$11.3 billion, delivering FCTG's second-strongest start to a year (behind only the FY20 1H).
Corporate TTV increased 16.8 percent to a record AU$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 percent to AU$5.2 billion, with scale benefits achieved across a diverse mass market, including luxury, complementary, and independent brand ranges.
Comments by Charlene Leiss, President of the Americas, Flight Centre Travel Group:
“We continue to experience tremendous growth over the first half of the fiscal year, with both our corporate and leisure businesses delivering increased revenue across the Americas.
“Our flagship business travel divisions Corporate Traveler and FCM Travel continue to set a high bar for business travel across the globe, as our North American corporate division is now the company’s largest operation.
“To further build upon this momentum, we’ve taken exciting steps over the last several months to ensure we’re set up for continued success in our best performing sectors.
“Our plans we have put in place across the corporate and leisure sides of the business will enable us to better identify opportunities for growth, improve efficiency, and drive value to our customers, as we look to ultimately maximize our potential in the U.S.
“We’ve begun to fast track our expansion in the SME corporate sector through a new regional structure has allowed us to start to expand our Corporate Traveler footprint across the country.
“With key hubs now set up in Boston/New York, Chicago, and Southern California, we’re able to attract more customers and more quickly grow our share of the SME market, one of the fastest-growing segments within the industry.
“On the FCM side, we’ve continued to focus on our work on productive operations, as we look to digitalize our operating model to help lower costs and grow income. Our commitment to improving our productive operations will not only enhance our service offering, but also optimize efficiency and increase scalability.
“During the first half, we also made a significant artificial intelligence push with the launch of an ‘AI Center of Excellence,’ a new global division that is focusing on promoting, adopting, and integrating AI technologies into our corporate divisions.
“Our impressive work in the technology space continues to be unmatched, as well as being integral to the ongoing success of our leading digital platforms, Melon and FCM Platform, which have allowed us to accelerate our corporate growth and transform the customer experience.
“In the year ahead, we’ll look to capitalize on the strong leisure opportunities in the U.S. market as well, with a renewed focus on both the independent and luxury sectors, through the new Envoyage brand and Scott Dunn, respectively. Just launched this week, Envoyage will serve as the new global home for the company's independent travel agents and agencies.
“Given our recent growth trajectory and proven track record of innovation, we’re excited about the future potential of the business and opportunity to further grow our market share across the country.”
Comments by Chris Galanty, Global CEO, Flight Centre Corporate:
“Our corporate businesses have had a strong start to H1 of FY24 globally, contributing 52 percent of Flight Centre Travel Group’s (ASX:FLT) total transaction value, with our proven organic growth model again delivering record overall sales.
"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.
“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 percent of pre-COVID transaction volume levels, pointing to our healthy market-share growth.
“At the end of January 2024, our corporate brands had secured new accounts with projected annual spends of circa AU$1.3 billion, with FCM Travel typically winning customers from competitors, and Corporate Traveler securing a mix of unmanaged and smaller, managed accounts.
“We continue to make strides in the technology space with mass adoption of our Corporate Traveler 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.
“We’re also progressing our corporate AI Center 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.
“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.
“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.”
