Flight Centre’s move into online technology has gathered pace with the travel retail giant today announcing it has bought 70% of the BYOjet.com business, just days after it agreed to buy US online youth travel company StudentUniverse.com.
BYOjet specialises in low cost airfares and turns over $100 million a year. It also operates the JETMAX white label booking system for travel agents and has a robust online technology platform.
Managing Director Graham Turner said these recent acquisitions demonstrate Flight Centre’s determination to move into new areas of business, specifically online youth travel and low cost carrier airfares.
“While we have strong overall market share in both the leisure and corporate sectors in Australia and elsewhere, we see opportunities to grow more aggressively in some sections of the market that haven’t previously been priorities,” he said.
“The low cost airfare sector is an obvious opportunity and the investments we are making throughout our business provide further evidence of our intention to fast-track our growth and to develop stronger foundations in the space globally.”
Flight Centre is paying $2.52 million for 70% of Professional Performance Systems, the company that owns BYOjet.com, with options to move to 100% depending on future performance.
It may also be required to make an additional cash payment at the end of the 2016 financial year depending on BYOjet’s earnings.
Mr Turner said: “We see strong potential for BYOjet’s future growth by:
- Giving the business access to FLT’s vast array of privately negotiated airfares, which will significant increase its flight range
- Increasing sales of other products, including hotels and insurance
- Improving its contracting
- Launching the business in new markets
Founder Lenny Padowitz will retain 13.6% while listed company Disruptive Investment Group, which bought into PPS a couple of years ago, will hold 16.4%.
Mr Padowitz, who founded the company in 2010, will remain CEO.