Did you know the Flight Centre Travel Group is in the early stages of a business transformation program? A plan that’s expected to make the company more money in a faster amount of time?
The plan was revealed this morning in the company’s financial results, although it’s has been in place since the start of the second half of the 2016/17 year.
Led by Chief Operating Officer, Melanie Waters-Ryan, the program aims to fast-tracking the company’s revenue growth, delivering new efficiencies and containing costs.
These goals will be achieved over the next three to five years by focusing on four initiatives including digital commerce growth, which will come through internally created platform like Aunt Betty as well as online acquisitions such as StudentUniverse.
Additionally, the Group will focus on investing in growth brands and business models in leisure and corporate travel such as the Ignite Travel Group; there’ll also be globalising of air, land and IT businesses, similar to how Flight Centre combined two Asia DMCs to create one larger DMC; and there’ll be a focus on reducing cost growth and improving network efficiency.
The program is being led by Chief Operating Officer, Melanie Waters-Ryan, and in its infancy has already made “some benefits” to the business, which Flight Centre says will be visible in 2018 results.
While the Flight Centre Travel Group not-so-quietly takes over the world (in 12 months bought five European countries, grew in India, became a DMC, went mobile, entered hotel management & more) it’s doing so with a fairly stable financial standing.
As the company expected, its 2016/17 profits were better than expected with an underlying profit before tax (PBT) of $329.5 million.
Although the figure was in the higher end of the Group’s revised estimate $300-$330 million guidance, it was also a 6.5 percent dip on the prior year.
According to the group, the result came as a result of a 22.4 percent decrease in underlying PBT during the first half, which outweighed a 4.7 percent growth in the second half.
Flight Centre attributed the first half losses to an airfares deflation in key markets, currency fluctuations, political uncertainty and under performance in Asia, the Middle East and the UK.
Despite the challenge, the Group’s total transaction value (TTV) reached an all-time high of $20.1 billion, topping the $19.3 billion achieved during the last financial year.
“FLT has now delivered 21 years of TTV growth in 22 years as a listed entity, a statistic that highlights its diversity, the strength of its continuously evolving omni-channel network and its ability to change strategic direction and target new growth opportunities.
Graham Turner, Flight Centre Travel Group Managing Director
In Australia and New Zealand, sales increased in both leisure and corporate travel, with the company achieving record air volumes and record room nights.
However, Australian leisure profits decreased slightly, with international airfare deflation impacting results.