TURBULENCE IN FLIGHT CENTRE'S 'GOLDEN ERA'
Written on the 24 February 2015 by Laura Daquino
THE YOUTH, Baby Boomers and corporates - three markets that Flight Centre Travel Group (ASX: FLT) is putting its money on as carrying the company through an overall declining period of leisure travel.
Striking gold offshore
That being said, almost half of FLT's global network (47 per cent) is now located outside of Australia, with Flight Centre USA being the second largest company operation to generate more than AUD$1 billion in TTV in the six months to December 31 last year.
Costs pulling the fleet down
A downturn in consumer confidence corresponded with increased investment in terms of new shop designs, marketing strategies such as SEM that incurred higher costs and wage increases.
Where the money isTurner says the long term goal for the next 20 years is targeting three different markets.
"Through many of our brands including the recently added Topdeck, we are showing our focus on the youth market and may look to more acquisitions in this area where we feel we have a strong offering," he says.
"The youth market seems to be resistant to the ebbs and flows of the economy.
"We are also very focused on Baby Boomers and designing more offerings for them considering 186,000 are entering the market each year in Australia and they are typically strong premium travellers.
"The other one is corporate, who like to spend lots of money on travel, and we are seeing a lot of movement towards."
Directors today declared a fully franked interim dividend of 55c per share to be paid on April 16. This is equal to the 2013/14 interim dividend.
Flight Centre has maintained its guidance for a full-year underlying profit before tax in the range of $360 million to $390 million, which was updated in December last year.