Flight Centre Travel Group’s domestic business is expected to fall short of its ‘normal growth trajectory’ for the year, according to the company’s latest market update.
The Flight Centre Travel Group said based on current trading results, it is expecting an underlying profit before tax of between $355 million and $365 million for the 12 months to 30 June 2015.
The mid-point – $360 million – is at the bottom of the company’s targeted range of $360 million to $390 million.
It is also 4.4 percent lower than the record $376.5 million achieved during the 2013/14 year.
Flight Centre Managing Director Graham Turner said while international business will ‘deliver solid profit growth’, the Australian business will ‘not achieve its normal growth trajectory’.
“Corporate travel results have generally been reasonable, although the downturn in the resources sector has again affected performance in Western Australia and the Australian corporate travel market as a whole.”
Graham Turner, Flight Centre Managing Director
In the overseas market, solid growth is expected to come out of the UK, US, Singapore and South Africa.
While in Australia, the total transaction value (TTV) will exceed last year’s by three percent.
Flight Centre says this growth was driven by corporate business, which is up about four percent in turnover terms.
Excluding Travel Money, overall leisure sales are likely to be relatively flat, while earnings before interest and tax (EBIT) will fall short of the record result achieved the prior 12 months.
“On a positive note for the longer term, airline competition remains healthy in Australia, with international capacity up again this year and about 50 airlines servicing outbound routes.”
Graham Turner, Flight Centre Managing Director
“This competition looks set to continue, with Airbus recently predicting in its Global Market Forecast that the passenger aircraft fleet serving the Australia South Pacific region will almost double by 2033,” he said.
“This supports our belief that the next 20 years will represent a Golden Era of Travel, as customers will have more choice, better in-flight experiences and continued access to highly affordable fares.”
Moving forward, Flight Centre will focus on and invest in the key strategies that will underpin it journey from travel agent to the world’s best person-to-person travel experience retailer.
This will be achieved through selling world class brands that are manufacturing exclusive FLT products; being person-to-person travel experts; working from branded business spaces; and offering blended access so customer can touch, browse and buy products.
The company will also work to build its information power by storing more profiles, patterns and predictions and become a more effective sales and marketing machine.
