Flight Centre Travel Group (FCTG) is expecting to close its books on the 2024 financial year with underlying margins exceeding 2% on corporate and leisure businesses which in turn will bring its group-wide margin up to its target.
In a new statement issued today to the Australian Securities Exchange, FCTG is expecting a Total Transaction Value (TTV) of $23.7 billion, up $1.7 billion on the prior year and in line with its record result from 2019.
Underlying profit before tax are expected to close between $316 million and $324 million, more than double that of the $138.8 million profit recorded the year prior.
The result is a slight downgrade from a projected $340 million profit expected earlier this year, a result impacted by some mild internal volatility stemming from the closure of loss-making brands, other internal restructuring and ongoing deflation in airfares throughout the year and especially in the 2H.
Following internal reviews, FCTG made the decision to close its Discova Central Americas DMC along with its US wholesaler GoGo Vacations, both of which were failing to perform and turn a profit.
Furthermore, the StudentUniverse retail brand has also been realigned into a special online travel agency business unit alongside Aunt Betty and BYOJet and is now targeting break-even in 2025 and a turnaround from a $9.5 million loss this year.
Flight Centre Travel Group Managing Director, Graham Turner, said market conditions were again challenging in FY2024 but solid growth was delivered as consumers prioritised travel over other discretionary expenses.
“Average international airfares decreased by 6% globally during the 2H, compared to the FY23 2H and by almost 13% in Australia to offset the circa 10% growth we recorded in ticket volumes in Australia during the six months to Jun 30,” Turner commented.
“While this has slowed our TTV growth, we welcome this deflation and believe it is a potential tailwind in the months ahead, given it is likely to stimulate further demand for international travel.”
Turner added that he expects further improvement in key metrics in the short term.
“From a sales perspective, the corporate business continues to out-perform, delivering yet another year of record TTV and finishing FY24 about 35% larger in sales terms than FY19, despite customer activity in the sector globally still being about 20% below pre-COVID levels.
“The global leisure business is also recovering strongly, following a major transformation initiated just prior to the pandemic, and is now more efficient, more productive and more profitable than it was pre-COVID,” Turner concluded.
