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Flight Centre reports $364 million loss, global travel kickstarting recovery

The Flight Centre Travel Group (FLT) has reported a $364 million underlying net loss after tax for the financial year 2021. Regardless, the global travel giant remains optimistic thanks to the Arrival Revival of global travel now underway.

The Flight Centre Travel Group (FLT) has reported a $364 million underlying net loss after tax for the financial year 2021. Regardless, the global travel giant remains optimistic thanks to the Arrival Revival of global travel now underway.

Despite yet another expected loss, The Flight Centre Travel Group (FLT) says its recovery is gaining momentum, with travel demand escalating globally during the fourth quarter (Q4) of the 2021 fiscal year (FY21).

The company says recovery was particularly strong in the US – the leisure and wholesale businesses returned to profit late in the year – and in the corporate sector, with total transaction value (TTV) globally rebounding to 40% of pre-pandemic levels by June 30, 2021.

While ongoing lockdowns throughout Australia are currently impacting near-term bookings, FLT says trading conditions and the travel outlook are generally improving, with vaccination programs gaining momentum worldwide and restrictions being removed or relaxed in several key markets, which is leading to strong and immediate spikes in demand.

Group-wide, FLT says it continues to target a return to monthly corporate and leisure profitability during FY22, subject to vaccinations continuing to prove effective against all COVID strains, domestic borders reopening and staying open and further international travel resumptions.

Speaking about the results and outlook, Flight Centre Travel Group CEO, Graham Skroo Turner said, “FY21 was another challenging year for our industry, but conditions have gradually started to improve.”

“When lockdowns have lifted and borders have re-opened – as they have just started to do in a more meaningful way outside of Australia and New Zealand – we have typically seen immediate and strong travel recovery, which is what we have now started to see in key locations like the US, Canada and Europe. The near-term outlook has also improved in the UK, another large and important market for our company, with most restrictions now lifted and people learning to live with the virus.

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Skroo Turner, FCTG CEO

“As an organisation, we too have learnt a lot during the past 18 months, particularly about being resilient, consistent and as optimistic as possible during tough times. Our priorities have evolved from emergency cost-cutting at the beginning of the crisis to maintaining those significantly reduced expenses, while still developing and implementing our technology, improving productivity and finetuning our recovery strategies to drive stronger future returns.

“Looking ahead, we believe our position as a diversified global business with compelling customer offerings across three main travel divisions – leisure, corporate and supply – will be of enormous value and a great advantage to us and to our major suppliers. Although we can’t predict the future, given the current government-enforced restrictions, we are targeting a return to monthly profitability later in FY22 and to return to pre-COVID TTV by June 2024, but with significantly reduced ongoing operating costs.

“Travel will inevitably be more complex in the post-COVID world and customers will require more assistance as they navigate new requirements and try to understand any restrictions that may still apply. In this type of environment, our people’s knowledge and our enhanced systems will prove invaluable at every step of the customer journey.”

At the time of writing, FLT shares were up by 1% off the back of the announcement, trading at $16.91 on the ASX.

Read the full financial report here.