Flight Centre Travel Group end of financial year results – 2021/2022
Corporate Segment Result & Strategic Update
Since the start of the pandemic, FLT’s corporate businesses have focused on Grow To Win, a global strategy based on enhancing capabilities across both the FCM and Corporate Traveller brands, retaining existing customers and winning large volumes of new accounts.
This strategy has started to deliver tangible benefits, as evidenced by the $2.5billion pipeline of FY22 account wins, global market-share growth, and the return to record monthly gross TTV levels in June 2022. The business is now set to gain scale benefits as transactions take off and as efficiencies deliver a lower cost per transaction, paving the way for profit growth.
During FY22, the corporate business delivered a $13.5million profit, which was underpinned by a $38.6million 4Q result.
TTV increased 158% to $5.6billion over the year, with $2.3billion generated during the 4Q – a TTV run-rate that would, if extrapolated over the year to June 30, 2023, exceed the record $8.9billion result achieved during FY19.
The ANZ, Americas and EMEA regions each generated circa 30% of FY22 corporate TTV, highlighting the business’s geographic diversity, with the balance coming from Asia, a region that now includes the start-up FCM Japan joint venture (launched in January).
In Australia, FLT maintains very high corporate market-share and continues to win unmanaged business and accounts from competitors. Wins are accelerating, as competitors struggle to meet clients’ needs in the current trading climate.
The Americas and EMEA businesses are, however, likely to overtake ANZ as the company’s largest corporate regions in the near-term given comparative market sizes, FLT’s small but growing market-share and the volume of new business being won within the two regions.
Overall, FLT’s corporate market-share in Australia, the US, the UK, Canada, New Zealand, and South Africa has increased from 6.3% during the FY19 2H to 7% during the FY22 2H (Source: GDS/MIDT data).
Comments from Marcus Eklund, FCM Global Managing Director:
“The past year has seen a resurgent global FCM business which is testament to the growing confidence among our clients in FCM’s products, services, and people. With an operational footprint that spans over 100 countries, we have experienced immediate and strong uplift in key locations as restrictions eased. This is particularly true of America and the EU, where business travel has firmly rebounded.
“Having accelerated our investment in next generation omnichannel technology throughout the pandemic, we were able to ramp up swiftly and provide innovative solutions through the debut of our new proprietary platform, and further boosted our capabilities with the launch FCM Booking in the US and Canada. These significant developments reflect our focus on user experience and flexibility, and firmly position us as leaders in the tech travel space.
“It is this ability to deliver an incomparable, globally consistent experience alongside enhanced service and support, that gives us a competitive advantage and has proven to be incredibly appealing to clients and prospects. So much so, over the last 12 months, we’ve fast-tracked market-share growth and clinched a record-breaking number of new accounts.
“However, there is no doubt that the pandemic has introduced added complexity and sharpened the way we meet ever-changing client requirements. Admittedly, the return to travel has not been without its challenges and caused a lot of friction in the industry and supply chain. And while this has negatively impacted the traveller experience in the short term, we expect this friction to slowly ease in the coming months.
“In this ever-evolving travel landscape, we will continue to adapt through investment in user-centric tech and innovative services, working collaboratively with our customers, travel partners and industry bodies as we shape the future business travel experience.
“While there will likely be further hurdles to overcome – many outside of our control – our actions through the pandemic demonstrated our resilience and preparedness for whatever challenges occur and gives us confidence in the year ahead.”