The Flight Centre Travel Group Ltd (ASX: FLT) share price has been on the road to recovery this month.
At Tuesday’s market close, the travel agent’s shares finished 3.73% higher to $18.64. Since the start of September, Flight Centre shares are up around 14%, and up 35% in a month.
Why are Flight Centre shares pushing higher recently?
There are a few reasons as to why the Flight Centre share price has been climbing in recent times.
The company released its full-year results in late August, highlighting month-on-month sales revenue growth despite lockdowns and heavy restrictions. In particular, the corporate sector in the United States gained momentum as trading conditions generally improved.
The vaccination rollouts in the United States and Europe are considered to be well advanced, with both economies reopening.
Back in Australia, Qantas Airways Ltd (ASX: QAN) announced that it’s taking bookings for flights to several popular destinations from 18 December. The forecast for Australia and New Zealand markets is that they will have a positive impact early next calendar year.
Flight Centre projects that the United States, Canada and the United Kingdom are poised for strong returns in FY22. Coupled with its leaner and more efficient cost-base model, the company expects this to provide solid profits over the long term.
Flight Centre also revealed its expansion plans for Japan via a joint venture with NSF Engagement Corporation. The online travel agent’s leading FCM travel management business will enter the fourth-largest corporate travel market from January 2022.
Management stated it intends to win new local, regional and multi-national accounts, while also enhancing existing services in Japan.
However, it could be some time before Flight Centre returns to pre-COVID levels.
Based on the current level of expenditure, the company needs to generate around 50% of its pre-COVID total transaction value (TTV) in corporate and around 40% of pre-COVID TTV in leisure.
Flight Centre share price snapshot
Over the past 12 months, Flight Centre shares have travelled almost 40% higher, with year to date up more than 15%.
Flight Centre presides a market capitalisation of roughly $3.72 billion, and has close to 200 million shares on its books.