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Flight Centre Records Profit Surge as International Borders Reopen

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Travel agent giant Flight Centre joins a list of tourism industry players that have rebounded from the doldrums of the pandemic, recording a financial recovery on the back of reopening borders and increased demand for flights and accommodation.

The travel agency said that it booked a $47 million (US$30.4 million) net profit after tax in the 12 months to June 30, 2023, swinging from a loss of $287 million in fiscal 2022. The company’s revenue surged to $2.28 million from $1.01 million.

Flight Centre’s Managing Director Graham Turner said that financial performance improved as the company benefitted from the lifting of travel borders and the strategies it implemented.

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The company invested in the acquisition of Scott Dunn and Luxperience, the reopening of Flight Centre shops that shut during the pandemic, and the upcoming reintroduction of cruise brand Cruiseabout in Australia.

Further, the company has embarked on a broader rollout of its Stage & Screen and FCM Meetings and Events, the return of Corporate Traveller in New York via the new Bryant Park Hub, the deployment of a new centralised global hub for multinational corporate clients, and technology.

The company also said that it added 2,500 people to right-size its global sales force workforce.

“Sales more than doubled group-wide as our leisure and corporate divisions both delivered more than $10 billion in annual total transaction values (TTV) for the first time,” Mr. Turner said. “Our transformed leisure business is also on a steep TTV trajectory recovery, with several businesses including online and the independent agency network delivering record sales.”

Mr. Turner noted that the company witnessed outbound capacity in Australia reach 85 percent of pre-COVID levels at the end of fiscal 2023.  Flight Centre is expecting near-term increases from key airline partners including Emirates, Singapore Airlines, Qantas, China Southern, and Cathay Pacific.

For fiscal 2024, Flight Centre forecasts international routes to increase and airfare prices to gradually start decreasing more significantly, making the industry dynamics more favourable for travellers. The company also expects further growth for its leisure and corporate TTV.

Meanwhile, Flight Centre’s managing director criticised the federal government’s decision to deny the request of Qatar Airways to add more flights in Australia, who made the decision in the “national interest.”

“There’s no logic to it, and it is a bit of a worry because we have more demand than capacity,” Mr. Turner told ABC Radio. “You could argue that it could have been in Qantas’ interests, it certainly wasn’t in Virgin’s interest because they have a codeshare relationship with Qatar, so I just don’t think it was an argument that held any water.”

Transport Minister Catherine King earlier defended her decision to reject the request of the Middle Eastern airline to add 28 flights per week, saying it was to ensure a strong aviation industry in Australia.

Alan Joyce, the CEO of Australia’s flag carrier, lobbied for the move saying it would distort the market.

In response, Virgin Australia CEO Jayne Hrdlicka disagreed, expressing disappointment at the developments.

“It’s a disappointing statement and I’m sure that every CEO in the country was disappointed to hear that there’s one company in the country that should be protected and profits should be protected,” Ms. Hrdlicka said, referring to Qantas’ earnings.

Flight Centre’s board declared a dividend of $0.18 per share, the first payout since the pandemic.

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