Flight Centre says economy class will be cheaper to fly, but expect a premium price for business
Finding better business class seats for its booming corporate travel arm is just one of the ‘efficiencies’ Flight Centre says should come from its expansion of AI for customers.
Flight Centre’s corporate travel division is ramping up its use of artificial intelligence and automation to increase its global market share and make it easier for businesses battling elevated airfares in premium cabins.
FCM Travel, the world’s fourth-largest corporate travel provider, expects AI will allow it to optimise business travel spending and meet growing demand while helping companies spend smarter amid economic uncertainty.
Flight Centre’s chief operating officer Melissa Elf says improved AI capability would serve customers better as most looked to increase travel budgets in 2025 despite inflation and slowing consumer spending.
“Corporate travel is seen as a necessity to winning business, meeting their own people and driving team performance as well as events and conferences,” she said.
“With many businesses cost conscious at the moment, there is a desire to make their dollar go further. It is not about cutting back on spending, but how do they get more value out of it.”
Ms Elf said businesses remained committed to shuttling staff in business class despite airfares remaining elevated in a bid to keep employees satisfied and engaged.
“Travel policies are also playing a role by ensuring workers are able to travel more comfortably and arrive ready to work. The issue for businesses is that it is hard to find a business class seat still on those major routes to London and the US,” she said.
The ASX-listed group, which has corporate clients including Wesfarmers, Optus and Toyota, anticipated little relief for travellers looking for cheaper airfares in premium cabins in 2025.
FCM Consulting global senior air consultant Jason Kramer said international airfares would only fall in economy class only due to additional capacity due to come online from Asia, the Middle East and the US.
Virgin Australia will operate flights to Doha from June using Qatar Airways aircraft and crew, amid the Middle Eastern carrier’s plan to take a 25 per cent stake in the country’s second-largest airline.
Mr Kramer added that domestic travel in Australia would however increase due to high demand, a lack of competition, lower seat capacity and slow aircraft deliveries.
“The administration status of Rex has reduced competition and slow aircraft deliveries by Boeing and Airbus due to strikes, production challenges and engine shortages will challenge the Australian carriers’ ability to keep up with demand,” he said.
“High demand is being met with seat capacity in the domestic market that will hover between 93-95 per cent of the pre-pandemic levels of 2019.”
Flight Centre is looking to further deploy improved technology platforms for its corporate arm and was looking to streamline the way that customers engaged and booked as it looked to stay ahead of the game, competitive and solve customer problems.
Its FCM Platform is streamlining bookings with personalised services, and its new AI Centre of Excellence aims to improve customer service. The goal is to solve client challenges using a mix of technology, automation, and skilled agents without sacrificing the customer experience.
“That’s how we believe we win business by looking at what the challenges customers have today, and how we solve that is through technology, service people or a combination of all three,” Ms Elf said.
“Like every business, we want to look at ways to lift productivity and efficiency gains, and this is where AI or automation can make us more efficient, productive and answer the challenges customers have without it ruining the experience.”
It noted that the use of data and machine learning will generate the biggest levers of change over the next three years for corporate procurement teams and their suppliers.
FCM Travel generated 31 per cent of Flight Centre’s fiscal year 2024 total transaction value compared to around 20 per cent in 2019, with new business wins and the onboarding of key multinational customers being a main driver making it now the largest division in the organisation by TTV.
The top industries travelled for FCM Travel were Manufacturing, Technology, Government, Finance and Banking, and Education.
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