Flight Centre Travel Group (FCTG) released its year-end results on 27th August for its 2020 Fiscal Year, which show an optimistic future for its corporate brands FCM Travel Solutions and Corporate Traveller despite a major downturn in the travel industry.
Whilst FCTG experienced severe losses (AUD$510M underlying loss before tax) due to unprecedented travel restrictions caused by the COVID-19 pandemic, FCM Travel Solutions and Corporate Traveller proved to be resilient. During the global shutdown, the two business travel divisions landed a record amount of new business and pipeline of potential opportunities, meaning they are well positioned to fuel FCTG’s recovery.
FCM Travel Solutions, which has a presence in 97 countries, won new business globally with total projected annual spend (pre-COVID) of USD$1.3billion, thus consolidating its position in the top three global travel management companies and increasing market share.
FCM’s new accounts include multinational and national large enterprise corporations and government agencies. Together these wins strengthen an already diverse global customer base, which includes a solid portfolio of companies in mining, energy and construction that continued to book essential travel throughout the crisis. About 25% of FCM’s total transaction value (TTV) currently comes from government, mining/resources and health/pharma sectors.
Meanwhile Corporate Traveller, which specialises in providing travel management services to SME companies secured new business globally in the region of USD$400M. Corporate Traveller operates in the USA, Canada, UK, South Africa, Australia, New Zealand and India.
Overall, FCM Travel Solutions and Corporate Traveller saw a profit before tax of roughly AUD$65million during fiscal year 2020 and are well placed to break-even on domestic/regional volumes. The corporate divisions recorded strong first half growth and were on track to top $10billion in TTV before industry-wide activity slowed significantly from March.
Prior to the coronavirus outbreak, FCTG had achieved $150million in global profits (including both its corporate and leisure businesses), for the first eight months of the fiscal year. TTV had also been tracking at record levels through to February 29th, before decreasing significantly in March.
Chris Galanty, Global CEO of Flight Centre’s corporate travel business said: “We are committed to not just getting through this crisis, but to taking advantage of the post COVID market. The pandemic has caused a fundamental global dislocation of the business travel industry and we have had to make difficult decisions. However, we didn’t cut back on investing in implementation, sales, account management and solution design. We made that decision from the outset. If Flight Centre’s corporate divisions are going to come out of this successfully, we needed to keep growing. Our corporate businesses, particularly FCM Travel Solutions, have won record new business in our financial year to end June 2020. And the majority of that was won between January to June in the midst of the pandemic. To achieve this during such an incredibly challenging period is testament to our agile approach in delivering the right solutions and high levels of personal service to our corporate customers.”