The Flight Centre Travel Group recorded a AU$117 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 2 per cent to a record AU$6 billion.
Its underlying profit increased 7 per cent year-on-year – markedly less than the 565 per cent increase recorded in the previous corresponding period, with the company citing a “challenging” first quarter and a downturn in its Asia operations.
Underlying corporate PBT increased 4 per cent, to AU$96 million, in the six months to 31 December 2024. In its financial statement, the Australian company said its corporate business has recovered to 143 per cent of its 1H 2019 size and is “well ahead of the market’s estimated recovery to circa 80 per cent of pre-Covid activity”.
The group’s corporate business contributed approximately 53 per cent of overall TTV, which rose 3 per cent year-on-year to AU$11.7 billion.
Flight Centre Travel Group’s global corporate CEO, Chris Galanty, attributed corporate TTV growth to “the significant investment in our ‘Productive Operations’ initiative”, which includes building a single global operating system for both its Corporate Traveller and FCM brands. This system “drives every activity through the right channel, lowering costs and growing income, while delighting customers through personal service and automation,” the company said in its 1H filings.
Galanty said the PO initiative, combined with the company’s recent investments in AI, is expected to deliver an uptick in productivity (calculated as TTV per full-time employee) of between 15 and 20 per cent from FY24 to FY26.
According to the company’s financial statement, the 1H performance of its corporate travel arm was impacted by downtrading – global customers either maintaining or reducing travel – and an AU$4 million loss in Asia. Its operations in all other regions (Americas, Europe, Middle East, Africa, Australia and New Zealand) collectively delivered PBT growth of close to 14 per cent and saw an approximate 3 per cent increase in TTV.
Based on global distribution system sales data from the period, Flight Centre said its corporate business saw an increase in global market share from 4 to 5 per cent.
“The last six months of 2024 saw a huge step forward for our ‘Grow to Win’ model,” said Steve Norris, Flight Centre Travel Group managing director, EMEA. “FCM Travel in the UK has been a highlight in the corporate space with stand-out growth – and we hit the milestone of more than 700 customers now actively using our Melon platform for Corporate Traveller UK.”
The company said its propriety tech platform shave been “widely adopted” with the Corporate Traveller’s Melon platform now accounting for almost 25 per cent of the brand’s transactions in the Northern Hemisphere.
“Looking ahead, we have a solid pipeline of new account wins coming on board to fuel future TTV growth, with over AUD$800 million worth of wins in the financial year to date with for FCM Travel,” Galanty said, adding that Corporate Traveller has also secured “a large volume of smaller accounts, with our new client ‘stick rate’ aided by our rapid onboarding and follow-up”.