FLIGHT CENTRE SKY HIGH

Written on the 10 June 2010

FLIGHT CENTRE SKY HIGH

FLIGHT Centre Limited (FLT) has upgraded its pre-tax profit forecast for FY10 by $30 million, despite travel disruptions from Icelandic volcano Eyjafjallajokull last month.

Managing director Graham Turner (pictured) expects a profit band between $190 million and $200 million, compared to previous targets between $160 million and $180 million.

“Sales volumes have remained healthy globally and trading conditions have gradually started to improve in most of our overseas businesses during the second half,” he says.

“The Australian business has continued to perform strongly and has not yet experienced the slowdown in demand that some retailers have reported recently.

“The strong UK performance is pleasing, considering the economic turmoil locally and in parts of Europe, the short-term disruption to air travel caused by last month’s ash clouds and the ongoing distraction associated with the British Airways strikes.”

He says the New Zealand and Canadian business have recorded significant growth off a low base, US losses have decreased and the UK performance has been the strongest out of FLT’s international businesses.

“In the USA, losses have decreased substantially year-on-year. The corporate business is again trading profitably, wholesaler GoGo continues to contribute positively and the Liberty retail network is on track for healthy profits in the peak May-June booking period.”

He says that despite the unrest in Bangkok there have been few cancellations on Thailand flights, while FLT will be closely monitoring how recent falls in value for the Australian dollar will affect sales.

“Adverse currency movements also continue to be offset by the savings that are available on some international airfares.”

FLT shares jumped 5 per cent to $17.18 per unit today.


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