Flight Centre upgrades guidance as corporate earnings outpace leisure
Flight Centre exceeded its profit guidance, thanks to corporate travel earnings at a record level, even though the market for business travellers is still in recovery mode.
Flight Centre joined Alliance Air Services and Ardent Leisure in upgrading its outlook, declaring full-year earnings before interest, tax, depreciation and amortisation in financial year 2023 were between $295 million and $305 million, up from guidance issued at its half-year results for between $270 million and $290 million.
Flight Centre boss Graham Turner says business travel is not yet back to normal, but it has grown its customer base. Dan Peled
The travel agent said high airfares and a big expansion in corporate travel clients meant total transaction volumes (TTV) swelled to a record $11 billion in financial year 2023, above the $8.9 billion achieved in 2019.
“In corporate, we expect that the large volume of new business that we continue to win – both from competitors and accounts that were previously unmanaged – will offset the impact on TTV flowing from lower-than-normal client spend,” Flight Centre managing director Graham Turner said.
A “strong and consistent” second-half recovery in leisure travel propelled TTV to about $10 billion, Flight Centre said, with no indications that the cost of living is hurting the sector.
“Looking ahead, our expectations are that leisure travellers will continue to prioritise holidays and experiences over other areas of discretionary spending, as we have seen in the past and as evidenced by the consistent year-on-year growth in outbound travel in large and important markets like Australia,” Mr Turner said.
Citigroup analyst Samuel Seow said the profit upgrade was largely attributed to the corporate business
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