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24 February, 2022

Flight Centre Group releases first half results and things are looking up!

Melbourne, Australia: April 12, 2018: Street view of a Flight Centre shop window. Flight Centre is Australia’s largest travel agency selling international flights, holidays and tours. A man walks past.

By Amy Shapiro

The Flight Centre Travel Group (FLT) has released their first half-year results in a series of statements to the Australian Securities Exchange.

The FY22 Half Year Results Release report from FLT, “one of the world’s largest travel retailers and corporate travel managers”, details their increasing confidence about the “rapid recovery” of these travel sectors, and states that “late January marks the start of a material and sustainable rebound”.

Some key take-outs of FLT’s report include:

Significant recent improvement in trading conditions globally;
Renewed confidence in return-to-profit timeframes;
Building on FY22 1H momentum; and
Successful strategic execution

In the report, FLT summarises their FY22 outlook by observing “positive signs but little visibility around recovery timing/extent, future variants” as well as “unprecedented but unquantifiable “pent-up” demand after 2 years of closures/lockdowns”.

In their FY22 Half Year Replacement Results Presentation, FLT attributes the improvement in trade conditions globally to “omicron cases decreasing”, “travel restrictions easing” and “demand quickly rebounding”.

The continued recovery of the industry is seen in their operational highlights as outlined in the Half Year Replacement Results Presentation. Key take-outs include:

Strong sales growth delivered during 1H;
Improved operational performance;
Structurally lower cost base maintained;
Small acquisitions completed;
Monthy operating cash outflows down; and
$1B+ liquidity position at December

According to the FY22 Half Year Results Release, pre-COVID (PC), the Flight Centre brand targeted roughy “15m days” in Australia.

Pointing towards this testament of significant recovery, FLT announced that they delivered a $10m TtV day on Tuesday (February 2022), “the first time that this milestone has been achieved during the pandemic”.

As FLT closes in on its return-to profit targets of 55 per cent of PC TtV in corporate and 45 per cent of PC TtV in leisure, the report says it is “targeting a near-term return to profitability after a significant recent improvement in market conditions globally”.

The report explains that “recovery globally is expected in the months ahead, assuming omicron cases continue to decrease and restrictions continue to ease”.

Graham Turner, Flight Centre Travel Group’s managing director, said in the report:

“After two years of lockdowns and heavy restrictions, we are now seeing the strongest indicators of a return to normalcy. Borders are now generally open and some governments, particularly in Europe, are starting to treat the virus as endemic.

“Confidence in the recovery is building and momentum is taking off globally, as we are clearly seeing right now in both the corporate and leisure sectors and particularly in the three regions that materially drive our results – EMEA, the Americas and Australia.

“While there may be further COVID-related challenges to overcome in the future, we believe we are well-positioned for recover as the world reopens”.

FLT says it will, however, “continue to monitor market conditions and developments, given uncertainty around future variants and government responses to them” as well as the current tensions between Ukraine and Russia.

The full reports and further releases from the Flight Centre Group are available on their ASX website HERE.

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Email the Travel Weekly team at traveldesk@travelweekly.com.au

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