Flight Centre’s profits may have slightly dipped during FY16, but the group’s Managing Director is hoping for a brighter future, which will be paved by actions and initiatives over the next 12 months.
The company’s latest financial report revealed that the travel giant made $352.4 million in underlying profit before tax during the year to June 2016, a 3.8 percent drop compared to the $366.3 million earned in the prior year.
The decrease was attributed to a number of factors including airfare price wars, which resulted in a four percent decrease in value of tickets sold to the US despite 6.2 percent more fares distributed during the 12-month period.
Investments, such as the recent acquisitions of StudentUniverse and BYOjet, also contributed to the lower result, along with network upgrades.
While profits may have taken a small hit, the company’s total transaction value (TTV) reached a new record of $19.3 billion – $1.7 billion higher than the previous milestone and a 9.7 percent increase compared to $17.6 billion during FY15.
Record TTV was achieved in the company’s 10 regions, including Australia, which topped $10 billion for the first time.
Several brands grew strongly, including FX specialist Travel Money Oz, Escape Travel, Flight Centre Business Travel and niche corporate brands Stage and Screen and cievents.
“The strong sales growth was particularly pleasing and meant that, on average, the group sold travel valued at more than $50 million every day of last year.”
Graham Turner, Flight Centre Managing Director
“TTV increased in both leisure and corporate travel but was generally stronger in corporate as we turned over more than $6billion globally and consolidated our position as one of the world’s largest travel management companies.”
Looking ahead
Turner said 2017 will be another “important year” for the travel group as it continues to focus on six key areas of growth.
These areas include changing the brand and product journey; evolving the shop and physical journey with more hype stores; improving the sales journey for clients; adding to the business journey; changing the people journey; and rolling out more in the digital journey.
“This evolution is well underway and has seen our company invest significantly in initiatives that will drive future growth.”
Graham Turner, Flight Centre Managing Director
Initiatives and investments over the next few years aim to turn Flight Centre into “the world’s most exciting and profitable travel retailer, personally delivering amazing experiences to its people, customers and partners”.
As previously highlighted by the company, there’ll be emphasis on online with plans to launch transaction websites in Europe, Asia, the UAE and South Africa and enhance existing ones in Australia, the America, and New Zealand.
Regarding market conditions, Turner believes conditions will “remain volatile” especially in the UK and the USA.
He expects the BREXIT vote to affect consumer confidence, but believes low US airfares will stimulate demand in a soft market.
“There is a degree of uncertainty within our key economies at the start of the new year and it’s impossible to predict future conditions, but we see improvement opportunities within our businesses and growth prospects globally,” Turner added.