Flight Centre Travel (ASX:FLT)

Graham Turner
Market Cap (AUD): 4.35B
Sector: Consumer Discretionary
Last Trade (AUD): 43.6 +0.56 (+1.28%)
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1. About

Flight Centre Travel Group is one of the world’s largest travel agency groups, it has Company-owned operations in 23 countries and a corporate travel management network that spans more than 90 countries through strategic licensing agreements with independent local operators. It employs more than 19,000 people globally and has a total of 2800 businesses. The Company, through both retail and corporate brands, provides a complete travel service for travellers in Hong Kong, China, Singapore, Australia, the UK, Canada, the United States, South Africa, Dubai, India, and New Zealand.

2. Business model


The Company Operates the following divisions:[1]



Revenue ($’000)

% of total Revenue

% of Profit (before Int, Tax, Depn & Amort)

Profit Drivers[2]

Australia & NZ




  • $250million underlying PBT achieved, down 4% in AUD
  • Australian results adversely impacted by non-recurring system change disruption, temporary sales force contraction & impact of brand mergers
  • Record TTV in Australia – underpinned by solid corporate growth
  • New leisure models & products in place – home-based agency model, interest free holidays, Captain’s Packages
  • Digital enhancements – solid online sales growth & better capabilities
  • Acquired businesses (Travel Managers & Executive Travel) contributing to NZ growth





  • Strong profit growth – more than doubled to $70m
  • Driven by good corporate results, contribution from acquired business (LDV) & leisure turnaround (circa $8m in Flight Centre brand)
  • Improvement driven by network enhancements, changed product & marketing strategies, digital progress
  • Now more than 500 home-based agents in North America through Independent by Liberty Travel (US) and Independent by Flight Centre (Canada) offerings





  • 15% TTV growth to $3.1b – region generated circa 14% of group TTV.
  • UK & Europe profit up 24% in AUD, despite impacts of UK credit card changes & investment in FCM Germany start-up
  • Record UAE profit (up circa 400%) & TTV during 1st year in EMEA segment, despite impacts of leisure business closure





  • Strong TTV growth – up 30% - from emerging region which includes Singapore, Malaysia, India, Mainland China & Hong Kong
  • Focusing on core corporate business in all countries expect for India - leisure businesses downsized/closed
  • Modest profit achieved in India
  • Corporate business & FY17 Travel Tours acquisition contributing to strong TTV growth

Other Segment




  • Segment includes TEN & other “global” businesses
  • Offset by modest losses from BHMA, op-ex (some BT expenses), M&A expenses, LTRP & ESP costs & increased global incentive payments
  • Overall cost growth driven largely by inclusion of tour operating costs & addition of acquired businesses

3. Strategy


Stronger IT Backbone[3]

  • New in-store systems (GDS) now fully deployed after Australia & NZ FY18 roll-out
  • New finance platform being deployed – Americas roll-out underway, Australia roll-out set to begin late in FY19


Leisure Network

  • Rebrand & Grow R&G) plan completed in Australia – 1200 sales people across 250 shops redeployed during 2H
  • Home-based agency acquisitions (Australia, NZ), USA start-up
  • Stronger digital platforms, lead management technology, new websites, mobile apps and services


Corporate Network

  • FCM technology suite consolidated & relaunched as FCM Connect
  • Small acquisitions in Canada & NZ plus investment in Germany start-up
  • New products – Sam (AI app), Your CT (SME portal), Lumo (predicts flight delays for customers)


New Business Verticals

  • Hotel management business acquired (BHMA), Americas-based DMC (Olympus)
  • FC Exclusives (voucher model) just launched in Australia

4. Markets


The Company operates in the following industries:[4]



Industry Revenue (2018)

Growth Rate

Travel Agency and Tour Arrangement Services (Australia)

$8 billion

4.8% (annual 13-18)

Travel Agencies (UK)

£33 billion

1.8% (annual 14-19)

Travel Agencies (US)

$40 billion

5.0% (annual 13-18)

Travel Agencies (China)

$76 billion

9.5% (annual 12-17)

5. Competition


Major competitors include:[5]


  • Harvey World Travel
  • Corporate Travel Management Limited (ASX:CTD)
  • Helloworld Limited (ASX:HLO)
  • Wotif.com Holdings Limited (ASX:WTF)
  • Thomas Cook AG (LON:TCG)

6. History



Flight Centre opened its first store in Sydney, Australia with an aggressive growth strategy in mind and a goal of being one of the largest travel retailers in the world



Flight Centre has 80 shops in Australia and New Zealand



Flight Centre established Corporate Traveller in Australia



Flight Centre opened its first store in Canada



1st Corporate Traveller was opened in Canada



Flight Centre was placed 3rd on the list of Top Employers in Canada by the Globe & Mail’s Report on Business Magazine



Flight Centre opened its 100th shop in North America



Flight Centre ranked as New Zealand’s best employer (large company) in the Unlimited/JRA Best Places to Work Survey



The Flight Centre brand network spanned Australia, New Zealand, the United Kingdom, South Africa, Canada and the United States. The Company had over 1500 shops and a global staff of over 8,000 team members



Acquired USA’s Liberty Travel



Canada & USA split businesses: FC Canada and Liberty Travel USA



1st Employment Office opened in Vancouver, Corporate and LAG (Lowest Airfare Guarantee) Traveller reintroduced



1st Intrepid My Adventure Store opened in Toronto and also 1st Cruiseabout opened in Canada (White Rock, BC)



Flight Centre became accessible 24/7



1st Corporate Traveller office opened in Montreal, Quebec. 1st Flight Centre shop opened in Winnipeg, Manitoba



Flight Centre acquired Ireland’s Travelplan Corporate Limited, a Dublin-based travel management business, from the Abbey Travel Group



Flight Centre acquired leading US-based youth and student travel specialist StudentUniverse.com, FLT has secured 70% interest in the BYOjet.com business



Flight Centre acquired Business Travel Development (BTD), a small privately-owned corporate travel agency based in the Netherland



The Flight Centre Travel Group (FLT) has formally completed its acquisition of fast-growing Asia-based hotel management company Bespoke Hospitality Management Asia (BHMA)[7]

FLT acquired 75% of the share capital in Les Voyages Laurier Du Vallon Inc.

FLT acquired 100% of the share capital in Olympus Tours (Olympus), a Destination Management Company (DMC)

FLT acquired 100% of the share capital in Travel Managers Group Limited (TMG). TMG is a large broker based retail travel group in New Zealand, providing systems and product to approximately 180 home-based agents.

FLT acquired 100% of the share capital of Executive Travel Limited (ETL)

FLT acquired 100% of Travel Partners Holdings Pty Limited (Travel Partners



FLT obtained control of Buffalo Tours (Singapore) Pte Ltd and Buffalo Tours (Hongkong) Limited as a result of the overarching shareholder agreement giving FLT a majority representation on the Board, with no change to the shareholding of 58.5%.

7. Team


Board of Directors[9]


Gary Smith – Non-Executive Chairman

Graham “Skroo” Turner – Chief Executive Officer

Robert Baker – Non-Executive Director

John Eales – Non-Executive Director

Colette Garnsey – Non-Executive Director


Global Leaders


Melanie Waters-Ryan – Chief Operating Officer

Adam Campbell – Chief Financial Officer

Chris Galanty – MD, United Kingdom

Dean Smith – MD, United States of America

Leonard Donaldson – Chief Information Officer

Atle Skalleberg – Chief Digital Officer

Carole Cooper – Global Peopleworks Leader


Global Managing Directors


Skroo Turner – MD, Australia

Chris Galanty – MD, United Kingdom

Dean Smith – MD, United States of America

John Beauvais – MD, Canada

Andrew Stark – MD, Republic of South Africa

David Coombes – MD, New Zealand

Andrew Boxall – MD, Dubai

Rakshit Desai – CEO, India

David Fraser – MD, Asia

read more

8. Financials


2018 Full Year Results Presentation


Financial Year 2017/18 (ended 30 June):[10]



Revenue ($’000)

% Change

Profit (before Int, Tax, Depn & Amort) ($’000)

% Change

Australia & NZ




















Other Segment










9. Risk


Major risks include:[11]


Credit Risk

Credit risk arising from cash and cash equivalents and financial asset investments is managed in accordance with Group’s treasury policy. Limits are set on credit rating, type of security, counterparty exposure and maturity.

Credit quality has been assessed by reference to external credit ratings (if available) or to historical information about counterparty default rates. There has been no significant increase to credit risk for cash and cash equivalents and financial assets.


Cash Flow and Fair Value Interest Rate Risk

The group holds borrowings which are issued at variable rates. FLT’s profit and operating cash flows are, therefore, exposed to changes in market interest rates.

The Group constantly analyses its interest rate exposure, taking into consideration refinancing, renewal of existing positions, alternative financing. The Group calculates the impact a defined interest rate shift will have on profit or loss. For each analysis, the same interest rate shift is used for all currencies.


Liquidity Risk

To manage liquidity risk, the group has access to additional financing via unused bank loan facilities, repurchase agreements, credit card facilities, bank guarantees and letter of credit facilities.


  1. ^ Annual Report 2018, P. 50-51
  2. ^ Investor Presentation 2018, P. 18-22
  3. ^ Investor Presentation 2018, P 9
  4. ^ http://www.ibisworld.com.au/industry/default.aspx?indid=490
    http://www.ibisworld.co.uk/market-research/travel-agencies.html https://www.ibisworld.com/industry/default.aspx?indid=1481
  5. ^ http://www.logistics-business-review.com/companies/flight_centre_limited
  6. ^ http://www.flightcentre.ca/pdf/FCStoryOct2013.pdf
  7. ^ http://www.fctgl.com/investors/asx-announcements/asx-announcements-2017/
  8. ^ Annual Report 2018, P 54-55
  9. ^ http://www.fctgl.com/about-us/corporate-directory/management-board-profiles/
  10. ^ Annual Report 2018, P. 50-51
  11. ^ Annual Report 2018, P. 62-64