Flight Centre Travel Group Limited (ASX: FLT) is a leading global travel company headquartered in Australia. Listed on the ASX, it operates leisure and corporate travel brands like Flight Centre, Corporate Traveller, and StudentUniverse, serving customers across Australia, North America, Europe, and Asia.
Flight Centre downgraded its FY 2025 underlying profit before tax (UPBT) forecast to $300 million–$335 million, down from $365 million–$405 million, a potential 17% reduction. This reflects weaker US travel demand due to US tariff policies, with an 11% drop in global US visitor arrivals in March 2025 versus March 2024. The revised forecast’s mid-point aligns with FY24’s $320 million UPBT, indicating flat growth. The company noted disrupted third-quarter momentum, particularly affecting leisure and corporate sales, with early April trends suggesting ongoing challenges.
Flight Centre announced a $200 million share buy-back programme on April 28, 2025, commencing May 12, 2025, with 65,903 shares repurchased at $12.85–$13.04 per share. This aims to reduce shares outstanding, boost earnings per share, and offset convertible note dilution. The buy-back reflects management’s confidence in long-term prospects despite short-term challenges, providing a positive signal to investors amid market uncertainty.
Flight Centre maintains a robust financial position, underpinned by a strong balance sheet and growing cash reserves, generating solid monthly profits. A $200 million receivables facility supports corporate working capital. With $525 million in convertible notes ($325 million due 2027, $200 million due 2028), its liquidity can cover obligations, including a May 2026 put date. This financial resilience enables strategic initiatives like the share buy-back while managing market volatility.
The leisure segment sees growth in lower-margin businesses like Travel Money, driving total transaction value but reducing profitability. Larger brands underperform due to tariff uncertainties. Flight Centre is promoting higher-value travel packages, like luxury holidays, to counter this trend and improve profitability by appealing to premium travel customers. Despite challenges, leisure profit tracks ahead of last year and above pre-COVID levels, showing resilience.
Flight Centre’s corporate division remains strong, with steady demand from Corporate Traveller and FCM brands, the latter securing over $1 billion in account wins year-to-date. Despite a flat global market, the corporate business is set for record TTV, with US growth accelerating, offsetting leisure weaknesses. Investor sentiment is cautious after the profit downgrade, with the share price declining on the ASX due to tariff and industry concerns. The buy-back, financial strength, and strategic adjustments offer a recovery foundation, and stabilised travel demand could restore market confidence.
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