FLT has today announced preliminary trading results for FY25, ahead of the release of its audited accounts on August 27.
The company expects to deliver record TTV in the order of $24.5billion during the year to June 30, 2025 (FY24: $23.7billion) and an UPBT between $285million and $295million – slightly below the $300million-$335million range that FLT previously guided.
The anticipated UPBT result follows a challenging fourth quarter (Q4) and reflects:
- Underperformance and additional, non-recurring costs in Asia
- The significant impacts of escalating tensions in the Middle East and the ongoing global downturn in bookings to the United States on leisure results late in the year
Managing Director Graham Turner said: “FY25 has proven to be volatile year for our industry, with geopolitical unrest and macroeconomic concerns slowing the strong post-COVID rebound. Within this challenging cycle, our diverse global brand network, which includes large-scale leisure and corporate businesses that capture a high percentage of recurring revenue from repeat and contracted customers, has again delivered record TTV – underlying the resilience of our global platform.”
This volatility temporarily disrupted traditional travel and booking patterns during FLT’s peak trading period as some customers either booked closer-to-home overseas holidays (In Australia, examples include China, Japan, Fiji and New Zealand) or delayed finalising travel plans. As a result, leisure’s FY25 UPBT is expected to dip below its strong FY24 result.
While the corporate business’s UPBT is also expected to be below FY24, the business has performed solidly and delivered year-on-year (YOY) profit growth outside of Asia, where losses predominantly relate to debt provisions and costs associated with the local mid-office system changes reported in first half (1H) results, as well as customer downtrading.
Reduced volume-based supplier payments (super over-rides) flowing from lower-than-normal TTV growth in core brands has also adversely affected FY25 margins and UPBT. The leisure business is expected to deliver solid YOY TTV growth, but the increase has been predominantly driven by lower margin brands that do not contribute materially to super override income.
The corporate business is expected to deliver another year of record TTV, but YOY growth has been reasonably modest in a flat global market, with the business’s account wins offsetting widespread client downtrading during the period. A stronger corporate TTV pipeline has been secured into FY26, with:
• FCM alone winning new contracted accounts with projected annual spends in the order of $1.3billion globally during FY25
• Corporate Traveller out-performing in the large US market during the 2H with TTV increasing 12 per cent in a contracting local market
FLT maintains a strong balance sheet and liquidity position, with healthy cash reserves and undrawn debt facilities. This strength allowed FLT to initiate an up to $200million issued capital buy-back during the 2H, bolster its cruise sector presence by acquiring Cruise Club in the UK during the 1H and invest in the initiatives outlined below.
The Flight Centre Travel Group Ltd (ASX:FLT) share price is down 8 per cent today, and 29 per cent since the start of 2025
Strategic response to cyclical challenges
Targeted measures are in place to address short-term market volatility, while positioning FLT for accelerated profit growth as conditions normalise, including:
- Cost Optimisation – fast-tracking initiatives in the new Global Business Services (GBS) area to enhance operational efficiency and lower costs, while continuing to focus on productivity gains and cost reduction group-wide
- Capital Discipline – targeting a 15-20 per cent capital expenditure reduction for FY26, with ongoing prioritisation of key projects and products
- Portfolio Refinement – closure or repositioning of under-performing assets, including StudentUniverse and wholesaler The Travel Junction (both closed during FY25)
- Supplier Partnerships – leveraging relationships globally to capitalise on evolving travel patterns, including airline capacity shifts, and emerging trends, including new air distribution models (New Distribution Capability or NDC)
New customer loyalty and AI initiatives announced today
In addition, the company has increased its investments in:
- Loyalty to enhance the customer experience (CX) – late in the FY26 1H, FLT plans to launch a leisure loyalty program initially spanning the Flight Centre, Cruiseabout and Travel Associates brands in Australia and potentially extending to other brands in the Flight Centre Travel Group. When fully operational, the program is expected to deliver a significant new revenue stream and a superior CX. Upfront investments to date include system upgrades, deployment of specialist teams and consultancy fees; and
- AI Innovation – to enhance CX, boost productivity and disrupt traditional offerings, FLT is developing new products through its AI Center of Excellence, including the recently relaunched Sam intelligent virtual assistant for FCM customers, and working with high profile external partners, including Quantium in the leisure sector
In addition, the company has today signed an agreement with Anthropic that is expected to:
- Deliver productivity gains and cost savings across a variety of disciplines through access to the Claude at Work enterprise solution
- Enhance the AI-powered chatbots that FLT’s leisure and corporate businesses are developing and deploying for their customers and people – including Sam in corporate and an AI co-consultant product for travel agents that is currently being trialled in leisure – given Claude can be integrated into other applications via an API
“To boost future profits, we have implemented comprehensive strategies to enhance performance and capitalise on the substantial opportunities ahead,” Turner said. “Our brand and business portfolio and strong balance sheet position us well for accelerated growth as market conditions stabilise, while the investments we are making in technology, CX and operational efficiency are set to drive competitive advantage and superior shareholder returns.”
