Flight Centre Travel Group (FLT) today released audited 2022 fiscal year (FY2022) accounts.
The company took positive early steps on the path to post-COVID recovery during FY22 by:
- Increasing market share in key countries and sectors
- Achieving its targeted leisure and corporate return to profitability timeframes; and
- Delivering better than expected full year earnings.
FLT also starts the new fiscal year with solid momentum after a strong finish to FY22, with TTV recovery accelerating during the fourth quarter (4Q) and the company recording a $35million underlying profit* for the period.
The 4Q uplift led to a modest second half (2H) profit – a significant turn-around from both the $184million loss recorded during the 1H, while heavy restrictions remained in place globally, and the $182.2million loss recorded during FY21 2H.
The $183.1million full year loss was:
- A 46% improvement on the $337.8million FY21 result; and
- Well within FLT’s upgraded guidance range ($180million-$190million loss).
Corporate Segment Result & Strategic Update
Since the start of the pandemic, FLT’s corporate businesses have focused on Grow To Win, a global strategy based on enhancing capabilities across both the FCM and Corporate Traveller brands, retaining existing customers and winning large volumes of new accounts.
This strategy has started to deliver tangible benefits, as evidenced by the $2.5billion pipeline of FY22 account wins, global market-share growth, and the return to record monthly gross TTV levels in June 2022. The business is now set to gain scale benefits as transactions take off and as efficiencies deliver a lower cost per transaction, paving the way for profit growth.
During FY22, the corporate business delivered a $13.5million profit, which was underpinned by a $38.6million 4Q result.
TTV increased 158% to $5.6billion over the year, with $2.3billion generated during the 4Q – a TTV run-rate that would, if extrapolated over the year to June 30, 2023, exceed the record $8.9billion result achieved during FY19.
The ANZ, Americas and EMEA regions each generated circa 30% of FY22 corporate TTV, highlighting the business’s geographic diversity, with the balance coming from Asia, a region that now includes the start-up FCM Japan joint venture (launched in January).
In Australia, FLT maintains very high corporate market-share and continues to win unmanaged business and accounts from competitors. Wins are accelerating, as competitors struggle to meet clients’ needs in the current trading climate.
The Americas and EMEA businesses are, however, likely to overtake ANZ as the company’s largest corporate regions in the near-term given comparative market sizes, FLT’s small but growing market-share and the volume of new business being won within the two regions.
Overall, FLT’s corporate market-share in Australia, the US, the UK, Canada, New Zealand, and South Africa has increased from 6.3% during the FY19 2H to 7% during the FY22 2H (Source: GDS/MIDT data).
Comments by Corporate Traveller Global Managing Director Tom Walley:
“There’s absolutely no doubting that corporate travel has come back in a big way since domestic and international borders reopened,” Mr Walley said.
“We expected a sugar rush early on but it seems absence really does make the heart grow fonder, even in the business world, as we see no let-up in corporates wanting to see their teams face-to-face.
“What we’ve seen is SMEs – the backbone of the Australian economy – leading the bounceback charge with the pent-up demand now reaching fever pitch both interstate and globally.
“The ‘new normal’ of conferencing, meetings and events looks set to be of a hybrid nature with organisations taking advantage of Flight Centre’s very own ‘glocal’ approach, whereby an event can be attended by hundreds, but also beamed around the world, if required.
“The fact is that business travellers get more done in a couple of days in-person than they would over any virtual platform, and given the low unemployment rate in Australia, in-house recruiters are chasing talent more than an ever.
“The best way to do this is to be able to speak to them one-on-one in a real world environment.
“We know there will still be some turbulence ahead with COVID waves and the staff shortages across the world, but what we’ve shown is our corporate business has built a world-class system in which we’ve been able to help our customers survive and thrive – it’s an excellent foundation for the new financial year.
“We’re privileged to work with such a range of diverse organisations and I’d like to thank them all for entrusting our four corporate brands with their travel management programmes. It’s never been more critical to have an expert on your side.”