For 1H2023 ending December 31, 2023, Flight Centre Travel Group (FCTG) reported a noteworthy achievement of an A$106 million (US$69 million) underlying profit before tax (PBT).
The corporate sector drove this success, with underlying corporate PBT experiencing a substantial 53 per cent increase, reaching A$93 million. This surge occurred prior to the realisation of benefits from the Productive Operations initiative.
Simultaneously, the leisure business displayed resilience, generating an underlying PBT of A$60 million. This not only surpassed pre-pandemic levels but also stood approximately 30 times higher than the A$2 million recorded in 1H2023 and double the A$30 million from 1H2019.
The overall performance of FCM reflected in a 15 per cent increase in total transaction value (TTV), totalling A$11.3 billion. This marked FCTG’s second most robust start to a year, following closely behind 1H2020.
Within the corporate segment, TTV increased by 16.8 per cent to an unprecedented A$5.9 billion. FCM achieved new sales milestones, significantly outpacing the broader corporate travel sector’s recovery.
Leisure TTV also exhibited an 18 per cent rise, reaching A$5.2 billion. This growth was attributed to the scale benefits derived from a diverse mass market, luxury, complementary, and independent brand range.
Bertrand Saillet, FCM managing director for Asia, said: “Asia has continued to outperform, with a significant 44 per cent increase in revenue, fuelled by strong performance across South-east Asia, India, and the re-opening of China.”
The company’s ability to secure new accounts, coupled with an impressive 98 per cent customer retention rate, contributed significantly to its success.
Chris Galanty, FCTG’s global corporate CEO, said that globally, corporate businesses have had a strong start to 1H2024, contributing 52 per cent to FCTG’s total transaction value.
“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.
“At the end of January 2024, our corporate brands had secured new accounts with projected annual spends of circa A$1.3 billion, with FCM Travel typically winning customers from competitors, and Corporate Traveller securing a mix of unmanaged and smaller, managed accounts.”
Looking ahead, FCTG aims to sustain this momentum into 2H2024. Galanty expressed optimism about future advancements and onboarding several major customers later in the year, building upon the solid foundation established in 1H2024.
