Profit Miss and Regional Headwinds Challenge Flight Centre’s Growth Momentum

Record Transaction Volume Amid Market Volatility

Flight Centre Travel Group (FLT) has announced preliminary unaudited results for the fiscal year ending June 30, 2025, revealing a record total transaction value (TTV) of approximately $24.5 billion. This marks a solid increase from the $23.7 billion recorded in FY24, underscoring the company’s ability to capture growing travel demand despite a challenging global environment.

However, the underlying profit before tax (UPBT) is expected to land between $285 million and $295 million, slightly below the previously guided range of $300 million to $335 million. The shortfall is attributed primarily to cyclical headwinds encountered late in the year, including geopolitical tensions in the Middle East and a downturn in bookings to the United States, which disrupted traditional leisure travel patterns during Flight Centre’s peak trading season.

Regional Challenges and Segment Performance

Asia proved a particularly difficult market, with underperformance and additional non-recurring costs weighing on results. The leisure segment, while still delivering year-on-year TTV growth, saw a dip in profitability due to a shift toward lower-margin brands and reduced volume-based supplier payments. Meanwhile, the corporate business maintained solid performance outside Asia, achieving modest profit growth and securing new contracted accounts with projected annual spends of around $1.3 billion globally through its FCM brand.

Corporate Traveller also outperformed in the large US market during the second half, increasing TTV by 12% despite a contracting local market. These results highlight Flight Centre’s diversified global footprint and its ability to navigate uneven regional demand.

Strategic Initiatives for Future Growth

In response to the short-term volatility, Flight Centre is accelerating several strategic initiatives aimed at enhancing operational efficiency and positioning the company for accelerated profit growth as market conditions stabilize. These include cost optimization through the new Global Business Services unit, targeted capital expenditure reductions of 15% to 20% for FY26, and portfolio refinement involving the closure or repositioning of underperforming assets such as StudentUniverse and The Travel Junction.

Additionally, Flight Centre is investing heavily in customer experience and technology innovation. The company plans to launch a leisure loyalty program in the first half of FY26, initially covering key Australian brands, with potential expansion. This program is expected to create a significant new revenue stream and improve customer engagement.

On the technology front, Flight Centre is advancing its artificial intelligence capabilities through its AI Center of Excellence. Recent developments include the relaunch of the Sam intelligent virtual assistant for corporate customers and a partnership with AI firm Anthropic to integrate the Claude at Work enterprise solution. These AI tools aim to boost productivity, reduce costs, and enhance the travel booking experience for both customers and agents.

Financial Strength and Market Position

Despite the profit pressures, Flight Centre maintains a robust balance sheet with healthy cash reserves and undrawn debt facilities. This financial strength enabled the company to initiate a $200 million capital buy-back in the second half of FY25 and expand its cruise sector presence through the acquisition of Cruise Club in the UK.

Managing Director Graham Turner emphasized the resilience of Flight Centre’s global platform amid a volatile year, noting that the company’s diverse brand network and recurring revenue streams provide a solid foundation for future growth. He also highlighted the company’s commitment to leveraging technology and operational improvements to deliver superior shareholder returns as market conditions improve.