Flight Centre Travel Group Ltd (ASX: FLT) Share Price and News
Who is Flight Centre (ASX:FLT)?
Flight Centre is a travel agency, serving both the leisure and corporate sectors, online and through bricks-and-mortar stores. It has several brands beyond its namesake flagship brand and even other business ventures, including forex service Travel Money Oz and a stake in bike retailer 99 Bikes.
Flight Centre remains headquartered Down Under, but well under half of its global TTV (Total Transaction Value) comes from Australia. Its three co-founders still have shares in the business, but only one – Graham Turner – is still involved on a day-to-day basis.
Flight Centre Company History
Flight Centre traces its origins back to the 1970s when Graham Turner and his co-founders ran bus tours around Europe. The company we know today began in 1982 in Sydney, as a seller of discounted airfares.
The company expanded rapidly across Australia and internationally both organically and through acquisitions. It has survived multiple crises including 9/11, the collapse of Ansett, the GFC and the COVID-19 pandemic.
It used the pandemic to become a leaner business, now employing only 12,000 people after having 20,000 pre-pandemic and closing a number of unviable brick and mortar outlets. It also opted to focus on higher-margin segments including corporate and luxury travel.
After losing over $1bn on underlying pre-tax earnings in 2020 and 2021, Graham Turner declared travel demand was back to normal after its FY24 results in which it made a pre-tax profit of $320m.
Future Outlook of Flight Centre
Flight Centre Travel Group's outlook for the future appears robust at first glance. It has guided to a pre-tax profit of $365-405m which it expects to be weighed towards the second half. However, the impacts of Donald Trump's trade war on travel remain to be seen.
Is Flight Centre (ASX: FLT) a Good Stock to Buy?
From an investment standpoint, Flight Centre Travel Group presents a mixed bag. Despite forecasting profit growth in FY25, the impact of the Trump administration's trade war remains to be seen. It is early days, but many other companies in the travel sector have been impacted by a fall in demand, although the impact on FLT may be lower than companies targeting lower-margin and more cost conscious consumers.
Investors should approach with caution, considering intense competition in the industry, the slashed commissions by many travel companies (especially airlines) in the aftermath of the pandemic, as well as the company's low 2% margins.
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Frequently Asked Questions
Flight Centre primarily operates as a global travel agency.