Flight Centre sees its corporate businesses as ‘well placed to break even on domestic and regional volumes’ despite ‘the most challenging trading environment’ ever
The Flight Centre brand is one of the most recognised in travel circles. The company, through its retail and corporate brands, provides a complete travel service for leisure and business travellers alike in Australia, New Zealand, the US, Canada, the UK, South Africa, Hong Kong, India, China, Singapore and Dubai and its corporate travel management network, FCM Travel Solutions, extends to more than 40 other countries through strategic licensing agreements with independent local operators.
So news that the company sees its corporate businesses as ‘well placed to break even on domestic and regional volumes’ despite ‘the most challenging trading environment’ ever is good news. Despite the heavy restrictions related to Covid-19 and traveller confidence, the company reported it achieved about AUD17 million in gross revenue in Jul-2020 as total transaction value exceeded AUD200 million globally for the month. This was mainly fuelled by its corporate travel businesses given that essential services have generally continued during lockdowns.
The company says that the corporate businesses, which were growing strongly and on track to deliver more than AUD10 billion in annual total transaction value before restrictions were imposed, traded profitably (underlying) during its 2020 financial year and have “established a solid platform for future growth” by winning a record amount of new business during the year.
The FCM Travel Solutions business alone secured new accounts with a new annualised spend of USD1.3 billion, with the majority of these wins coming in the second half of the financial year. As a whole global corporate business delivered a AUD74 million underlying profit before tax in FY2020.
But Covid-19 and, specifically, the government responses to it “have clearly had devastating impacts on businesses worldwide and on the airline, travel, tourism and hospitality industries in particular. This has severely impacted us and our people and some very tough decision have been made over the past four or five months, explains Graham Turner, founder and managing director of Flight Centre Group.