Flight Centre Travel Group’s (FCTG) corporate business has delivered a record amount of new accounts during a challenging period for the travel industry.
The corporate business, which includes brands FCM, Corporate Traveller, Stage & Screen, Flight Centre Business Travel and cievents, has fueled the company’s revenue generation during COVID-19 lockdowns, given that essential services have generally been permitted to travel.
FCTG’s corporate brands were growing strong and on track to deliver more than $10billion in annual TTV before restrictions were imposed. The brands were traded profitably (underlying) during FY20 and they have established a solid platform for future growth by winning a record amount of new business during the year.
FCM alone secured new accounts with an annualized spend of $US1.3billion during FY20, with most of these wins coming during the second half.
Other Key Highlights from today’s ASX Announcement include:
- $1.9b cash balance as at June 30, including circa $1.15b in liquidity
- Successfully building a longer liquidity runway
- COVID-19 cash burn slowly - revenue above initial projections, costs at targeted levels
- Short-term net operating cash outflow target surpassed
- $53m net outflow in July - below the $65m monthly target and including $17m in revenue
- $43m outflow with net benefit of JobKeeper subsidy included
- Underlying $475m-$525m FY20 loss expected:
- Losses incurred from March after government imposed heavy restrictions sparked an industry-wide downturn
“COVID-19 and, consequently the severe travel restrictions born of it, have caused devastating impacts on businesses worldwide, particularly the airline, travel, tourism and hospitality industries. Both our business and our people were directly affected, and thus, and some very tough decisions have been made over the past four and five months to preserve the stability and longevity of Flight Centre Travel Group,” says FCTG Americas President, Charlene Leiss. “However, despite ongoing restrictions, revenue has now started to increase, particularly in Europe, and we have surpassed our initial cash flow target, thereby extending our liquidity runway. We have also continued to win a record amount of new corporate accounts while generating an underlying corporate profit during FY20. This is a testament to both our corporate business’s resilience and its strong future growth prospects in this large, global travel sector.”