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Flight Centre narrows losses as international travel picks up

Leisure and corporate spending is at “post-COVID highs” in an “improved, but not fully recovered, trading environment”, says Flight Centre’s chief executive.

It comes as experts tell TND that people are returning to international travel despite cost-of-living pressures.

Flight Centre narrow losses

Flight Centre CEO Graham Turner said sales momentum that helped drive the travel agency’s recovery in 2022 continued through the first half of this year.

This resulted in an improved set of half-year results, despite the company not delivering a profit.

His comments come as the company reports it narrowed its statutory pre-tax loss to $18.3 million, down from a $276.1 million loss announced a year earlier.

Underlying earnings before interest, tax, depreciation and amortisation came in at $95 million, compared with a $184 million loss a year ago.

The value of transactions handled by the company more than trebled to $9.89 billion.

“In both leisure and corporate, we are achieving our strategic objectives and laying foundations for more meaningful profit recovery in the future,” Mr Turner said.

Flight Centre said all of its regions, apart from Asia, returned to profit in the first half.

Its corporate business delivered a record transaction value of $5 billion and is on track to top the previous annual high of $8.9 billion generated in 2018-19.

The leisure segment contributed 44 per cent of the group’s transaction value.

“We are not currently seeing evidence that the recovery is slowing with the leisure business currently trading at post-COVID highs and corporate travel activity escalating after the traditional holiday period,” Mr Turner said.

He expects further recovery in the second half and reiterated the group’s target for underlying earnings between $250 million and $280 million for the full year.

That will be aided by seasonality and an improvement in airline capacity.

Flight Centre expects international capacity to Australia will increase to 85 per cent of pre-COVID levels by June 30 as a number of key airlines, including Emirates, China Southern and Cathay Pacific, increase services.

The company did not declare any interim dividend, extending a dry run for shareholders.

International travel

The travel boom is partly being driven by people reuniting with loved ones. Photo: Getty

Meanwhile, international travel made a strong comeback in 2022, a huge boost for an industry struck by the pandemic, according to recent data from the Australian Bureau of Statistics.

More than 19 million arrivals and departures were recorded throughout the year, the ABS stated last week.

Although total arrivals for 2022 were just 45 per cent of 2019 levels, monthly figures showed the recovery building through the year, ABS head of migration statistics Jenny Dobak said.

Total arrivals in December reached 1.3 million, compared with less than 300,000 in January 2022.

Australia opened its borders fully to international travel in February 2022 after being closed for almost two years.

Tourism experts tell the TND that much of the demand is driven by families reuniting with loved ones after the pandemic, and by people holidaying abroad after being cooped up at home.

The return of foreign carriers and the extra capacity they bring to the market has also enabled people to travel to and from Australia.

Ivona Siniarska, a travel industry expert for 1000 Mile Travel Group, told TND that consumer confidence was returning to the travel sector.

“People are definitely travelling. We’re seeing people booking more and more proactively in advance,” she said.

“People are feeling more confident about making a booking or about actually being able to get on an aircraft. They feel like they get to go somewhere rather than worrying about changes, cancellations or border restrictions.”

There has been growth in arrivals since the pandemic. Photo: Getty

Frequent flyers

And in efforts to get Australians back in the sky and traveling overseas, Qantas this week announced ten of thousands of new international rewards seats to be released for frequent flyers.

The extra reward seats will be available across all cabins, including Business and First, on the airline’s full international network.

According to Qantas the most popular overseas destinations booked with points are London, Singapore, Bali, Tokyo and Los Angeles.

Qantas Loyalty CEO Olivia Wirth said reward seats on international flights were one of the most popular ways to use Qantas Points.

“Our frequent flyers have been using their points to book reward seats in record numbers, and demand for seats on international flights is particularly strong,” she said.

-with AAP

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