Company warns of “challenging trading climate globally”.
Flight Centre has released a trading update, indicating slowing growth in TTV despite record numbers of ticket sales, with “the volume increases the company is generating off-setting the significantly cheaper fares that are being offered”.
Over the full year FLT expects to exceed $20 billion in TTV for the first time, but underlying profit before tax is now expected to finish between $320 million and $355 million, with a “subdued first half likely to be followed by a stronger second half”.
In 2015/16 the company’s first half profit was $145.9 million, and for the current year this is now forecast to dip to between $105 million and $120 million, affected by widespread airline discounting, currency movements, subdued trading in the UK following the Brexit vote and lower than expected profits in the Top Deck and Back Roads Touring peak season.
CEO Graham Turner said the performance reflected similar sentiments about trading conditions in recent days by both Qantas and Virgin Australia. He said Flight Centre was seeing ticket volume growth of about 9% year on year, which was “outpacing industry growth and appears to be accelerating”.
More details in today’s issue of Travel Daily.