The corporate travel segment of FLT continued to outperform, handily outpacing the recovery of the larger market and generating record TTV in FY 23. The $11 billion result for FY23 was a 96% year-over-year rise (FY22: 5.6 billion) and a nearly 25% increase over the previous TTV record (FY19: $8.9 billion).
“FCM Asia has had a roaring performance in corporate travel, breaking 2019’s TTV record despite China being closed until January 2023,” stated Bertrand Saillet, Managing Director of FCM Asia. After China’s opening, this led to a robust performance in H2, with a 36% increase over H1.
Through significant important customer wins across the globe and a retention rate of more than 98 percent among current customers, we increased our market share in Asia.
“Our technological investments allowed us to develop the FCM Platform, which is exclusive to China and India, enabling us to provide technology on par with market standards while providing the best client experience. As a result, we have attracted Asian-based companies, making FCM the preferred TMC in the area.
“We are very well positioned for FY2023 and are working closely with our customers, suppliers, and partners,” the company stated, “with a significant year over year decrease in expense margins.”
Flight Centre Travel Group experiences significant profit growth in the fiscal year 2023.
During the 2023 fiscal year (FY23), there was a significant recovery and trading conditions improved.
- The second-best performance ever achieved: Total transaction value (TTV) growth of 112% to $22 billion.
underlying earnings before interest, tax, depreciation, and amortization (EBITDA) increased by around $485 million year over year to $301.6 million.
The business successfully carried out its core international strategies during FY23, which included:
- Grow to Win: Through excellent client retention and significant numbers of new account wins, this strategy has helped FLT outperform the larger industry recovery in the $US1.4 trillion global business travel sector. According to predictions from the Global Business Travel Association, FLT’s corporate TTV surpassed pre-COVID levels in June 2022, over two years before the expected industry recovery, and it continued to grow steadily throughout FY23.
FLT has maintained its investment in significant growth factors like:
- Technology: FCM corporate platforms power the omnichannel development of the Flight Centre brand
Innovation: By utilizing robotic process automation (RPA), artificial intelligence (AI), and machine learning to create a better customer experience while achieving sales and savings goals
Product Strengthening: As airlines heavily engage in new distribution models, such as New Distribution Capability (NDC), they are strengthening their product (content) aggregation capabilities to provide corporate clients the largest range of airfare options.
Global Corporate Travel Sector Comfortably Outpacing Industry Recovery
In FY23, FLT’s corporate travel division delivered record TTV while comfortably outpacing the recovery of the entire industry.
The $11 billion FY23 result reflected 96% year-over-year growth (FY22: $5.6 billion) and an increase of over 25% over the prior TTV record (FY19 $8.9 billion).
The Europe, Middle East, and Africa (EMEA) business surpassed its previous record by 59%, Asia by 24%, the Americas by 15.6%, and Australia-New Zealand (ANZ) by 10.5%. New TTV milestones were also reached in all other geographic segments.
With 31% of group corporate TTV generated by the Americas business, FLT’s largest corporate operation, it was barely ahead of ANZ (30%), EMEA (28%) and Asia (11%) in terms of revenue.
With growth once again being driven organically by high customer retention rates and a sizable pipeline of international account wins for both FCM (large market sector) and Corporate Traveller (SMEs/start-ups), corporate transaction volumes also exceeded pre-COVID levels, well ahead of the estimated industry-wide recovery of 70-75% of FY19 transaction levels.
With wins often coming from rivals, FCM gained new, committed clients with annual spending in the neighborhood of $1.6 billion. Corporate Traveller won more than half of its uncontracted business from previously unmanaged accounts.
In terms of EBITDA during FY23, the company generated an underlying profit of $190 million, an increase of about 3000% year over year (FY22: $6 million).
Source- Travel daily