Travel continues to be an “outlier” and a priority spend for many, according to the boss of Flight Centre Travel Group.
The comments came from Graham Turner, managing director of the Australian-based global travel group, as it reported a A$90 million year-on-year rise in underlying pre-tax profits to A$106 million in the half year to December 31.
Total transaction value (TTV) increased 15% to A$11.3billion, delivering the company’s second strongest start to a year.
Pre-tax profits from leisure travel exceeded pre-pandemic levels while the level from business travel was up by 53% to A$93 million.
The company highlighted plans to capture a greater share of the booming cruise sector with new wholesale and retail businesses.
A new brand, Envoyage, will consolidate Flight Centre’s expanding global network of independent agents and agencies.
Expansion in the luxury segment is also a longer-term strategic priority, powered by the group’s Travel Associates and recently acquired Luxperience and Scott Dunn brands.
However, the group has closed US-based operator GoGo after incurring half-year losses of A$7.3 million.
Scott Dunn opened in New York during the period, giving it a US east and west coast presence.
“The business overall continues to trade in line with expectations and will generate the bulk of its FY24 profit during its peak 2H booking periods.” Flight Centre said.
Reporting the first half results, Turner said: “At a time when discretionary budgets are typically tightening, travel remains an outlier and a priority spend for many.
“We are seeing ongoing solid demand for leisure and corporate travel, leading to our second strongest start to a year in TTV terms and accelerated activity in January and February, ahead of our busiest trading months.
“Within our businesses, key strategies are gaining traction and driving margin improvements, which is leading to stronger profits and shareholder returns.
“Our corporate business, which has been heavily growth focussed since the start of the pandemic, has continued to grow rapidly – well above the industry’s recovery rate – while also targeting efficiency gains.
“In leisure, profits and margins are now comfortably above comparative pre-Covid levels, with the prospect of further productivity-driven improvement.”
He added: “Looking ahead, we are well placed for the full year as we approach our busiest trading months.
“We have good momentum and early 2H trading has been strong.
“Positive lead indicators have also emerged, with international capacity expected to be almost back to pre-pandemic levels in Australia by the end of FY24 and air fare prices decreasing – by an average of 13% in Australia recently and about 7% globally over the 1H.”