Corporate travel will lead the recovery at Flight Centre with a chance it could profitable by the middle of next year.
But leisure revenue for the group has a much longer runway back due to the bulk of earnings coming from international tourism.
Here are the key takeaways from the address at the company’s annual general meeting yesterday by managing Director Graham Turner (pictured).
- FLT had approximately $1 billion in liquidity at the end of the first quarter.
- Cash burn has been marginally reduced. Down to $40m in September from $43m in July.
- Says further cost cutting should deliver further monthly savings of $9m.
- FLT Sept revenue was $25m, about 12% of what it usually is.
- Corp biz tracking at 18% year on year, global leisure at just 8%.
- Now profitable in China, UAE “and in Corporate Traveller in South Africa”.
- Not possible provide financial guidance for FY21 due to uncertainty.
- Short term revenue generation will be weighted to corporate domestic and regional travel in all major markets.
- Leisure travel revenue is heavily dependent (70% to 75%) on international tourism.
“We expect corporate to return to profit on a month to month basis basis before the leisure business, and possibly in late FY21,” said Turner.
“The global leisure business, which has a higher cost base and heavier international travel weighting, is expected to follow in FY22, although the recovery in both sectors will largely be in the various governments’ hands.”
Meanwhile, Chairman Gary Smith confirmed “about two thirds of our global workforce have lost their jobs either permanently or temporarily through no fault of their own as a result of actions taken by government.”