Flight Centre records ‘significant’ recovery but big losses remain
Flight Centre said its recovery was well underway after posting a top line profit of $8 million for March and while its global corporate business was back in the black and leisure was approaching breakeven.
Flight Centre has started a significant turnaround (Photo: Julian Smith/AAP PHOTOS)
The Brisbane-based company said it was profitable in March on both underlying profit before tax and underlying EBITDA (earnings before interest, tax, depreciation and amortisation) and was experiencing “strong momentum globally”.
It said it was expecting its EBITDA to be in the black for the five months to June 30 which it described as a “significant turnaround” compared with the $184 million loss during the first half of the financial year and a subdued January.
It was anticipating a full-year EBITDA loss of between $195 million and $225 million.
Growth had accelerated following the Omicron strain, but its total transaction value (a measure of the value of all the transactions booked through the company including plane tickets, cruise fares and hotel rooms) dipped in April.
The revival of the company’s fortunes follows a near-death experience when the pandemic hit in March 2020 and global and domestic travel was shut down. It was forced to lay off 6000 workers, and shutter 250 stores to survive.
However, its share price which had dipped below $9 at the start of the pandemic, has recovered to trade above $22.
The company reported that its total transaction value in March was almost triple the level of March last year and almost 60 per cent of the pre-Covid level.
Its global orporate business was back to 76 per cent of pre-Covid, while leisure was at 47 per cent.
It said it was forecasting that its monthly TTV would surpass the record level it reached in 2019 in 2023 “when market recovery reaches circa 70 per cent”.
International travel was showing strong signs of recovery for the company. It said about 70 per cent of all airline tickets issued by its stores in Australia in April were for international destinations. in January it was 45 per cent.
The company’s margins were still well below pre-Covid and the company said there was currently a higher corporate and domestic weighting in its earnings as well as a heavy component of VFR (visiting friends and relatives).
Its European corporate business was now back to 93 per cent of pre-Covid levels while South Africa was at 113 per cent and UAE 151 per cent.
