Just three years ago, Flight Centre Travel Group (FTCG) was forced to close down nearly all of its bricks and mortar stores and permanently let go 600 staff in Canada alone - and over 200 storefronts and 70% of its 20,000-strong workforce globally - due to COVID-19 losses, as Open Jaw reported in OCT, 2020. FCTG posted a loss of over AUD $500 million in the 2020 fiscal year.
But a post-pandemic travel boom has fuelled annual results that nearly match the company's 2019 global performance - and in some cases, break the company's previous records - even as the Canadian operation continued to post a loss.
On 29AUG, 2023, the Australia-based corporation announced earnings before interest, taxes, depreciation and amortization (EBITDA) of $301.6 million AUD for the 12 months ending 30JUN, 2023. That’s up nearly $485 million from fiscal year 2022, when the company was still reporting losses to the tune of $183.1 million.
Total transactional volume was reported at $22 billion for the most recent fiscal year, up 112% from the previous year but just slightly below the 2019 volume of $23.7 billion.
Furthermore, Flight Centre officials said their corporate travel business comfortably out-paced broader industry recovery, with a record total transactional value of $11 billion. That’s up 96% from last year and nearly 25% higher than their previous record of $8.9 billion in corporate travel transactions in fiscal year 2019.
Leisure travel also delivered more than $10 billion in transactions for this year.
“After an incredibly challenging period, we are pleased to report material profit and sales uplifts improved conditions during FY23,” said Flight Centre Travel Group Managing Director Graham Turner.
Chris Galanty, Global CEO, Flight Centre Corporate, said, “We’ve invested significantly for the future by focusing on customer retention and securing large volumes of new clients, in both the large market and SME segments, while expanding our sales force worldwide and introducing new innovative platforms and products for our customers globally."
Canada Still Catching Up
“We’re in a really good spot,” Chris Lynes, Managing Director for Flight Centre Travel Group Canada told Open Jaw in an interview on 30AUG. “It’s been a long road but we’re continuing down it, that’s for sure.”
Lynes said he wasn’t surprised by the growth in corporate sales.
"Corporate in Canada and globally has always been really consistently growing. We’ve kept our cost base at a really good level throughout, and our acquisition pipeline has been strong for years, so it doesn’t surprise me.”
Lynes conceded that Flight Centre’s retail division in Canada was not profitable in the last fiscal year (he said he was not at liberty to disclose figures) but that it will be this year.
“We’re in the middle of a transformation,” he said. “We’re moving a lot to an independent network as well as a reduced storefront. We’ve reduced our footprint for the bricks and mortar and have moved a little more online.
“We have significant plans for our retail division and expect it to be profitable this financial year. We’re committed to the Canadian market."
Lynes said there are many reasons for the losses in Canada.
If you look at the cost of any kind of travel this year it’s been exorbitant, and very difficult to find space. We’re expecting capacity to come back this year, which will help drive down prices and help the Canadian traveller.
“I flew to Vancouver this week and there were five 777 Dreamliners on, and every single flight was full. And the fares on those flights were incredible.”
Lynes also noted Canada was slower to lift travel restrictions than many other countries.
“We (Canada) opened up in the middle of our financial year. We definitely had a lag in our financial year. I think that’s driven a lot of our results. But the Canadian travel market is just booming right now.
