Flight Centre’s FY25: $24.5B TTV Up 3.3%, Underlying Profit Falls to $289M

Record Sales Amid Profit Pressure

Flight Centre Travel Group Limited (ASX – FLT) has reported its FY25 financial results, delivering a record total transaction value (TTV) of $24.5 billion, marking a 3.3% increase over the prior year and the 26th record in 30 years as a listed company. However, despite this sales milestone, the company’s underlying profit before tax (UPBT) declined by 9.8% to $289.1 million, reflecting a challenging global trading environment.

Statutory profit after tax also fell sharply by 22.3% to $108.2 million, underscoring the impact of geopolitical tensions, macroeconomic uncertainty, and regional underperformance, particularly in Asia. The fourth quarter was notably difficult, with escalating Middle East tensions disrupting peak leisure travel bookings and a downturn in US-bound travel affecting the leisure segment.

Capital Management and Shareholder Returns

In response to these pressures, Flight Centre undertook significant capital management initiatives totaling approximately $450 million. These included a $200 million buy-back of convertible notes, $57 million spent on on-market share buy-backs, and $100 million in debt repayments. The company also declared a fully franked final dividend of 29.0 cents per share, maintaining a combined payout ratio of 52% of underlying net profit after tax, signaling confidence in its balance sheet and future prospects.

FLT’s balance sheet remains robust, with net cash position and gearing ratio at a conservative 11.5%. The company’s capital allocation framework continues to balance growth funding with shareholder returns and financial prudence.

Strategic Investments and Innovation

During FY25, Flight Centre expanded its footprint in the buoyant cruise sector through the acquisition of Cruise Club UK, providing a platform for growth in the UK and strengthening its leisure offerings. The company is also investing heavily in digital transformation, artificial intelligence (AI), and customer experience enhancements. Notably, FLT plans to launch a leisure loyalty program in Australia during FY26, aiming to deepen customer engagement and unlock new revenue streams.

FLT’s AI Centre of Excellence and partnerships with industry leaders like Quantium and Anthropic are driving innovations such as AI-powered virtual travel assistants and automation of routine tasks, expected to boost productivity and customer satisfaction across its global brands.

Operational Challenges and Outlook

Asia’s underperformance, with a swing from profit to loss, and the geopolitical volatility in the Middle East during peak trading periods, weighed heavily on FY25 results. The leisure business saw a shift in travel patterns, with customers favoring shorter haul destinations like Japan over the United States. Corporate travel growth was modest but showed resilience, with strong performances in the US market from Corporate Traveller and FCM brands.

Looking ahead, Flight Centre expects FY26 first-half underlying profit to be flat due to ongoing volatility but anticipates accelerated profit growth in the second half as market conditions improve and strategic initiatives gain traction. The company is focused on cost optimisation, portfolio refinement including closure or repositioning of underperforming assets, and leveraging supplier relationships to capitalise on emerging travel trends and new distribution models.

Remuneration and Governance

FLT announced changes to its executive remuneration framework for FY26, simplifying incentive structures and increasing short-term incentive caps to 75% of fixed remuneration for key management personnel, subject to group profit gateways and non-financial performance metrics. The deferred incentive plan introduced in FY25 has been discontinued following unmet profit margin targets.

The company maintains strong governance and risk management frameworks, addressing financial, operational, compliance, and emerging risks, including cybersecurity and sustainability initiatives such as reforestation programs benefiting Indigenous communities.