FLIGHT CENTRE FINALLY LANDS EUROPE ACQUISITION
14 March 2016,
FLIGHT Centre Travel Group (ASX:FLT) has finally landed in Europe with its global expansion strategy following the purchase of Dutch corporate travel agency Business Travel Development.
The Brisbane-based company, which has ramped up its corporate travel acquisition program in the past year, has been skirting around the continent since taking a foothold in the UK 11 years ago and then expanding into Ireland in 2014.
While the privately-owned Business Travel Development (BTD) acquisition is relatively small, Flight Centre CEO Graham 'Skroo' Turner sees it as a low-cost, low-risk entry into the European market.
"BTD is a profitable business that we know well and that operates in one of the world's largest corporate travel markets," Turner says.
"Having a company-owned presence in the Netherlands strengthens our proposition for national and multi-national clients and gives us a platform for further growth in the country and in Europe more broadly.
"Future opportunities include the launch of a dedicated SME offering, to complement the FCM business and possibly a leisure travel offering in the longer term."
The purchase price has not been disclosed but, based on the BTD's annual turnover of 10.3 million euro ($15.1 million) in 2015, analysts have suggested the deal is worth between 1-2 million euro ($1.47-$2.94 million).
Flight Centre has had long-term links with BTD, which acted as the Netherlands licensee for the company's FCM Travel Solutions corporate travel subsidiary.
The FCM network was established in 2005 and now extends to 90 countries through both equity ownership and licensee arrangements.
Flight Centre's UK business, headed by Chris Galanty, will oversee the newly acquired FCM Netherlands operation.
Flight Centre's announcement comes on the heels of the High Court of Australia last week granting the Australian Competition and Consumer Commission special leave to appeal a Federal Court decision handed down late last year.
That decision had cleared Flight Centre of claims that it had engaged in price-fixing with major airlines between 2005 and 2009 through its widely publicised 'Price Beat Guarantee'. The High Court will hear the case later this year.