Flight Centre says travel demand ramping up despite turbulent services

Flight Centre says the barrage of cancellations, delays, higher airfares and reduced airline capacity is fuelling the “renaissance of the expert travel advisor”, with the ASX-listed travel agent tipping better conditions for fiscal 2023.

Company CEO and managing director Graham Turner said the ongoing disruptions in air travel has forced more travellers to lean on Flight Centre’s services, fuelling greater engagement between them and the travel agency’s staff.

“About half of our customers currently require extra help with their bookings because of changes and disruption, compared to 25% pre-COVID,” he said on Thursday.

“This more complex environment is fuelling what we are referring to as a ‘renaissance of the expert travel advisor’, as our people help the travelling public chart a path through this temporary turbulence.”

The company on Thursday reported statutory pre-tax loss of $337.8 million for financial year 2022, considerably better than the $601 million loss posted a year earlier. Underlying loss before interest, tax, depreciation and amortisation for the period landed at $183.1 million, in line with the $180 – $190 million guidance provided earlier this year, and a 46 per cent improvement on fiscal 2021.

Despite rising travel costs, Flight Centre told investors that customers, while cautious, were still keen to travel, and are willing to pay extra.

The company also acknowledged an uptick in new customers, with a bigger cohort of young travellers connecting with Flight Centre. Demand from that segment increased from 16 per cent to 25 per cent in the full-year, according to Flight Centre.

“After two years of unprecedented disruption to normal global travel patterns and other everyday activities, we are pleased to start FY23 with a considerably brighter outlook,” Turner said on Thursday.

“While the cost of living is generally increasing, very low unemployment globally and travel’s proven resilience are significant offsetting factors for our business, with customers having both the means and the desire to make the most of their limited vacation time after being denied that opportunity for some two years,” he added.