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FCM’s profit soars in H1 FY24, doubling pre-pandemic levels

Profit

Flight Centre achieves AUD$106 million profit in H1 FY24, doubling leisure business profits and marking significant corporate growth.

Flight Centre Travel Group achieved an AUD$106 million underlying profit before tax (PBT) for the half year to December 31, 2023.

The leisure business’s AUD$60million underlying PBT exceeded pre-pandemic levels and was:

  • Circa 30-times the AUD$2million FY23 first half (1H) result; and
  • Double the AUD$30million FY19 1H underlying PBT.

Underlying corporate PBT increased 53% to AUD$93 million, during another period of healthy, organic growth and ahead of the Productive Operations initiative’s benefits being realised.

Total transaction value (TTV) increased 15% to AUD$11.3 billion, delivering FCTG’s second-strongest start to a year (behind only the FY20 1H).

Corporate TTV increased 16.8% to a record AUD$5.9 billion, as the business again achieved new sales milestones and comfortably outpaced the broader corporate travel sector’s recovery.

Leisure TTV increased 18% to AUD$5.2 billion, with scale benefits being achieved across a diverse mass market, luxury, complementary and independent brand range.

Bertrand Saillet, FCM Managing Director, Asia, commented, “Asia has continued to outperform, with a significant 44% increase in revenue, fuelled by strong performance across Southeast Asia, India, and the re-opening of China.

Our strategic decisions to consolidate and focus on our core business offerings, investments in technology, and leveraging Global Business Solutions to increase automation, operational efficiencies, and productivity have contributed to our success.

With new account wins and strong customer retention rates of 98%, FCM Travel has become the preferred travel management company providing business travellers with a ‘Glocal’ travel experience.”

Chris Galanty, Global Corporate CEO, of Flight Centre Travel Group said: “Our corporate businesses have had a strong start to H1 of FY24 globally, contributing 52% of Flight Centre Travel Group’s total transaction value, with our proven organic growth model again delivering record overall sales.

“We’ve also achieved new milestones in the four geographic regions of Australia and New Zealand, the Americas, Europe, and Middle East and Africa and Asia.

“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% 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 $1.3billion, with FCM Travel typically winning customers from competitors, and Corporate Traveller securing a mix of unmanaged and smaller, managed accounts.

“We continue to make strides in the technology space with mass adoption of our Corporate Traveller Melon platform in the USA and Canada – with fast growth also being seen in the UK. FCM Platform has also seen successful growth with all existing customers anticipated to be migrated this year.

“We’re also progressing our corporate AI Centre of Excellence and that has seen new features added to the suite of products already available that have improved the customer experience and increased our operational productivity.

“Aside from technology, we’ve also been working tirelessly towards clear and consistent strategies that have been successfully executed globally, with these strategies initially focusing on ‘Grow to Win’, but now also include productive operations.

“We look forward to continuing this momentum into H2 of FY24 – with more exciting advancements to come later in the year – and some major customers to be onboarded globally.”

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Theodore is the Co-Founder and Managing Editor of TravelDailyNews Media Network; his responsibilities include business development and planning for TravelDailyNews long-term opportunities.

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