This week saw many travel brands drop their financial results for the year, but before you spit out your morning coffee in disgust, I promise this wrap will not seek to harangue you with an unwanted deluge of facts and figures. On a weekend that is practically a war crime, after all. So please breathe easy and read over my elevator pitches of performance, replete with emojis (this should be standard in ASX reporting).
Qantas
What pandemic? The Flying Kangaroo resumed the business of making huge profits and has well and truly put COVID in the rear vision mirror. The carrier’s latest financials saw it deliver an impressive $1.6 billion statutory profit after tax, improving significantly on the $1.25 billion posted the previous year. Also banking an extra $2.86 billion in revenue for the period, the carrier’s dominant position in Australia practically saw cash falling from the ceiling of its Mascot office. The true star though was its budget carrier Jetstar, which enjoyed a stellar 16% revenue boost to $5.71billion. It will be telling to see if Qantas maintains its new flightpath of repairing the brand damage left behind by Alan Joyce, or whether its growing piles of cash will see it return to some old bad habits. Time will tell.
Air New Zealand
The stiff upper lip of the Kiwi carrier may require more than liberal applications of lip balm after it finally weathers its ongoing engine crisis. Issues with its planes have plagued the carrier for some time, and its latest results laid bare the raw impact of having so much of its fleet out of action. Earnings dropped from $222 million to $189 million, while net profit after tax also dwindled by $20 million to $126 million. Outgoing CEO Greg Foran’s clear talent has been projecting optimism in the face of adversity, stating that Air NZ had acted “early and decisively” to right the ship. Having said that, the only certainty is that fleet disruption will bleed into the carrier’s performance of FY2026. Mayday! Mayday!
Helloworld
We are down for now, but we will come up with the ideas to get back on track. That is the vibe I’m getting from Helloworld, which continues to push valiantly against headwinds. TTV declined from $4.15 billion to $3.8 billion, and total profit after tax also took a hit, sliding by 7.3% to $28.48 million. A drop in average airfares and a trend away from long-haul travel were listed as the major drags on the bottom line, as well as recent agency closures. The company’s cash reserves also dropped substantially from $161.9 million to $79.4 million, but rather than being worrying leakage, the decrease was mainly attributable to $48.5 million of share purchases in Webjet Group Limited made during the year. That Helloworld is always thinking.
Flight Centre Travel Group
While headwinds have impacted most travel companies, FCTG managed to make modest gains across most key metrics. The business even had the temerity to post a record TTV of $24.5 billion in these volatile conditions. Specialist and independent categories performed well again, while TTV remained flat in the mass market Flight Centre division. Retooling for future growth was the order of the day, with some brands closed down, and others like Topdeck will be repositioned. In significant news, the Global Touring-managed brand will be capped at 18 guests in the pursuit of better resonating with Gen Z travellers. Underperformance will also see Topdeck refresh its touring suite with new styles, and plenty of cash splashed on a rebrand. The overhaul coincided with comments from FCTG MD Graham ‘Skroo’ Turner, with the industry titan expressing concerns that Aussies under 30 are turning away from travel.
Virgin Australia
Virgin Australia is shouting from the rooftops ‘we are back baby’, releasing its first financial report since re-listing on the ASX this year. The figures were as per program, with no hidden surprises, as its profits and revenue fell tightly in line with what was mapped out to investors in its prospectus. Revenue increased handsomely by close to 9%, delivering a $456 million bump to $5.81 billion, while pro forma underlying net profit improved by 27.8% to $331 million. Buried in the report detailing future fleet and loyalty growth, was a nugget of interest for travellers and advisors. VA confirmed it still has $93 million worth of COVID credits on its books, which are due for expiry on 30 June 2026. Any credits not used will result in a non-cash benefit for the carrier, a surplus that will not be included in its future underlying EBIT. Better hurry!
Away from the facts and figures of the ASX, C360 in Brisbane saw a massive attendance of interested parties gain further insight into the strengths and weaknesses of the local cruise sector. In a major coup for CLIA Australasia, the industry body’s new global chief Budd Darr made his way Down Under to reassure the market of its importance to the international ecosystem. In a sideline chat with my colleague Damian Francis, Darr said travel advisors would be the prime movers of success in Australia for years to come. It’s no secret that brand withdrawals in Australia are a major concern for Australia, and that point was made abundantly clear in the opening speech by local CLIA MD Joel Katz. A story penned by Cruise Weekly Editor Myles Stedman relayed many of Katz’s clear concerns, with the CLIA chief stating he was not surprised by recent developments given the expensive operating environment and complex regulatory requirements facing cruise lines in Australia.
“This highlights what our industry has been saying for some time…we need to address rising costs that deter ships from our shores,” Katz urged.
Before I finish, it would be remiss of me not to mention the massive tourism news breaking in Tasmania this week. No, it’s not the arrival of more Spirit of Tasmania ships, although that has happened, it’s the dramatic axing of the world’s largest chocolate fountain. Yes, I hate to be the bearer of such not-so-sweet news, but a $12 million upgrade of Hobart’s Cadbury factory has been quietly scrubbed the fountain from its renders. Okay sure, there will still be an arboretum of cocoa trees, a chocolate history experience, and a mass ingredient barn, but if I can’t do butterfly in a vat of pure milk chocolate, then what has all this been about? I’ll leave with you with that rather vexing question, and until we meet again, have a wonderful weekend.
