Flight Centre posts $328.8 million profit amid ‘golden age’ of travel

DESPITE a tumultuous year for the travel industry, Flight Centre has posted a $328.8 million profit and announced a new joint venture.

17 Feb 2005: Flight Centre - half-year results. picRussell/Shakespeare travel companies logo logos shop shops exterior

FLIGHT Centre has defied a tumultuous year for the travel industry and posted a generally strong result for 2013-14 including 9.7 per cent growth in underlying profit to $376.5 million.

Statutory before-tax profit was down 7.3 per cent to $323.8 million due to writedowns on the agency’s underperforming US and Indian businesses, and an $11 million ACCC fine.

Flight Centre also announced a fully franked 95c share dividend.

Managing director Graham Turner said operational highlights included solid trading in most countries and continued network expansion, with an additional 1200 jobs created.

“For the fourth consecutive year, all 10 countries were profitable,” said Mr Turner.

A “golden age” of travel is dawning, characterised by cheaper fares, more choice, greater comfort and less flying time.

“While the Australian business remained the company’s main profit and sales driver, significant progress was again made overseas.”

Both the business and leisure travel sectors delivered increased sales and profits in Australia, but this had slowed since the Federal Budget, Mr Turner said.

There was no indication of any impact from Malaysia Airlines’ twin tragedies, of the missing flight MH370 and the MH17 disaster in the Ukraine.

Flight Centre is currently in the process of reinventing itself from travel agency to “world class retailer” with physical changes to its stores and greater accessibility for customers.

More products have been made available online and more after hours sales teams deployed.

Mr Turner said it was a strategic change as the world entered a “golden age of travel” characterised by more affordable fares, more choice, greater comfort and less flying time.

“Low cost carriers don’t suit all travellers but they have helped make it affordable for huge numbers of people to experience this golden age of travel,” he said.

“Travellers are the big winners.”

Flight Centre has also announced today a new joint venture with youth travel company Topdeck.

Mr Turner was one of the original founders of Topdeck Travel in 1973, and managing director James Nathan said it was a “very comfortable arrangement”.

“Like Back-Roads Touring, Topdeck Travel will continue to operate as an independent entity based out of headquarters in Brisbane and Chiswick, London,” said Mr Nathan.

“I will remain as the head of both businesses with the support of the current senior management and operations team.”

Originally published as Flight Centre posts $328.8 million profit amid ‘golden age’ of travel