Flight Centre’s Half-Year Results: A Tale of Two Quarters and a Strong 2H Outlook

Flight Centre Travel Group (ASX: FLT) has posted a $117 million underlying profit before tax (UPBT) for the first half of FY25, marking a 7% year-on-year (YoY) increase. This was driven by a strong second-quarter rebound following a more challenging Q1.

Total transaction value (TTV) came in at $11.7 billion, a 3% increase from last year, with Flight Centre’s corporate travel segment hitting a record $6 billion in TTV—now 143% of its pre-pandemic size. Meanwhile, the leisure business remains more profitable, productive, and efficient than it was before COVID, with emerging brands now making up about half of its TTV.

A Tale of Two Quarters: Strong 2Q Recovery

The first quarter was hampered by softer market conditions and lower income from supplier bonuses, but the second quarter saw a notable turnaround:

  • UPBT grew 14% in Q2, more than double the TTV growth rate.
  • A strong exit rate sets up Flight Centre for an even stronger second half, traditionally its peak trading period.
  • January 2025 already showed promising margin expansion, with Australian UPBT margins surpassing 2.3%.

Corporate Division: Bigger Than Ever, With More Growth Ahead

Corporate travel continues to shine, growing into a significantly larger business than pre-pandemic. It delivered a 4% UPBT increase to $96 million, despite temporary consolidation efforts. The division is targeting a 15-20% productivity boost by FY26, driven by:

  • AI and automation initiatives that enhance efficiency.
  • Growth in the US SME market, with January TTV up 19%.
  • Proprietary platforms like Corporate Traveller’s Melon, which now handles 25% of Northern Hemisphere transactions.

Leisure Business: Investing for Long-Term Growth

While Flight Centre’s leisure segment posted solid TTV growth, profits were flat YoY due to:

  • Lower supplier bonuses in Q1.
  • A $4 million investment in the booming cruise sector, including the Cruiseabout brand launch and new partnerships.

Looking ahead, Flight Centre is doubling down on luxury, cruise, and tour segments, aiming to double cruise and tour sales after already hitting $500 million in 1H25. The Flight Centre brand itself continues to gain operating leverage, with basket sizes up 12% YoY and stronger attachment rates on bookings.

FY25 Outlook: Stronger 2H Profit Expected

Flight Centre reaffirmed its full-year UPBT guidance of $365-$405 million, with the company tracking towards the low-to-mid range. With its busiest months still ahead, Flight Centre expects:

  • TTV growth to accelerate, helping to recover supplier bonuses.
  • Productivity gains from AI and corporate efficiency initiatives.
  • Stronger contributions from key brands, including Scott Dunn and Corporate Traveller USA.

An 11c fully franked interim dividend has been declared, a 10% increase from last year. This brings total shareholder returns to $150 million in fully franked dividends since the pandemic, alongside ongoing convertible note buybacks.

CEO Graham Turner remains optimistic, saying:

“Our foundations are solid, and we are well placed to deliver stronger second-half profits as volumes increase during our peak trading months.”

With a resilient corporate division, an evolving leisure business, and AI-driven efficiency improvements, Flight Centre is gearing up for a strong finish to FY25.