Flight Centre has seen a turnaround of almost half a billion AU dollars for the year ended June 30, from a loss of AUD377,8 million (R4,63 billion) the year before to a profit of AUD70,5 million (R864 million). These are consolidated results and include its South African operations.
70% of the profit was generated in the six months leading up to December 2022 after the return of increased corporate travel, buoyant domestic flight offers and the fast return of international airlines when the borders reopened after the pandemic.
Presenting the results, CEO Graham Turner was unsparing in his criticism of the Australian government’s decision to reject an application from Qatar Airways to double its flights to Australia.
“This is supposed to be a competitive market, a free market,” Turner told smh.com.au. He was concerned that this would keep airfares high.
Flight Centre’s results were boosted by a return to corporate travel – the group expected corporate travel globally to exceed 2019 levels by the end of 2024 as fares normalise.
“We spent a lot of time negotiating with businesses during COVID-19 to make sure they would continue to partner with us. We won a lot of work that way. This result is down to that success in the US and UK, but we expect Australian corporate travel to normalise as fares come down, and it becomes easier to book a seat,” Turner said.
Flight Centre found ways to boost productivity during the pandemic. Turner told Australian Financial Review www.afr.com, that Flight Centre had cut two out of every three jobs in the pandemic. It sold AUD22 billion-worth (R270 billion) of travel in the year to June 30, which equated to 92% of its pre-pandemic record. But it accomplished this with only 75% of its 2019 cost base.
Sales per full-time employee were 52% higher in 2023 than in 2019. Every staff member sold an average AUD1,8m (R22m) in bookings in 2023 versus AUD1,2 million (R14,7 million) in 2019.
Turner attributed this productivity to an improvement in working on tech platforms particularly on the corporate travel side of the business. He was confident that a lot of the productivity gains would remain.
In the financial year 2023, 60% of Flight Centre’s leisure bookings were for people aged 50 or older.
