The Flight Centre Travel Group recorded a AU$106 million underlying profit before tax (PBT) for the first half of its financial year, boosted by “strong” business travel growth which saw corporate total transaction value increase 16.8 per cent to a record AU$5.9 billion.
Its underlying profit increased AU$90 million, or 565 per cent, from AU$16 million in the previous corresponding period.
Underlying corporate PBT increased 53 per cent, to AU$93 million, in the six months to 31 December 2023. In its results statement, the Australian company said its corporate business “again achieved new sales milestones and comfortably outpaced the broader corporate travel sector’s recovery.”
The group’s corporate business contributed 52 per cent of overall TTV which rose 15 per cent to AU$11.3 billion, marking FCTG’s second-strongest start to a financial year behind only July-December 2019.
“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 per cent of pre-Covid transaction volume levels, pointing to our healthy market-share growth,” said Chris Galanty, global corporate CEO, Flight Centre Travel Group.
“We have seen strong corporate growth across Europe in the first half of the financial year with our flagship large market division FCM Travel in the UK up 17 per cent and Germany seeing a rise of 25 per cent – with the Netherlands leading the way having seen a 175 per cent increase,” said Steve Norris, Flight Centre Travel Group managing director, EMEA.
“Taking into consideration external factors, it’s pleasing to see airline yields remaining high, with an expectation that these are unlikely to reduce significantly – that’s despite pockets of industrial action still affecting a handful of countries across Europe,” added Norris.
FCTG noted that airfare price deflation affected overall TTV growth, with average international fares in Australia falling 13 per cent in October to December and by 7 per cent globally in 1H.
Regarding the provision of airline content, the company said that fares aggregator TP Connects is a “key part” of the group’s plan to improve access to airfares that are not currently available through traditional GDSs. It added: “Direct NDC connections are now in place and at various stages of development with circa 15 airlines globally and significant further growth is expected by June 30.”
The company also noted that the roll-out of its Melon platform to the SME customers of its Corporate Traveller division is on track to be completed by the end of June. “This will make our customer experience soar to a new level,” said Norris.
FCTG has also relaunched its FCM Meetings & Events business across the UK, UAE, France and Sweden, a sector that Norris said “has seen strong recovery as companies return to face-to-face interactions and collaboration.”
He added: “Looking ahead, we’re looking forward to our Productive Operations initiative continuing its roll-out across Europe, large customer wins beginning to trade in the third quarter of 2024, and all customers will be successfully migrated onto the FCM Platform by the end of June.”
At the end of January the company had secured new accounts with projected annual spends of around AU$1.3 billion.