Owners of Flight Centre Travel Group Ltd (ASX: FLT) shares will likely be glad to learn Australians are booking more international holidays than domestic trips for the first time since the pandemic began.
The company is still haemorrhaging around $40 million each month. However, the company’s CEO Graham Turner flagged an uptick of interest in overseas travel.
At the company’s annual general meeting (AGM) on Wednesday, he commented: “The Australian reopening plan has sparked a flurry of activity and created a genuine buzz, leading to a significant uplift in leisure enquiry and quotes in recent weeks.”
Over the past week, the Flight Centre share price plummeted 10%. It finished Friday’s session trading at $20.29.
Let’s take a closer look at the boss of Flight Centre’s optimism.
Buckle up for a return to travel
Flight Centre shares might be in for a rebound soon, as international travel looks to be gearing up to do the same.
Turner told the company’s AGM the number of bookings to Fiji placed through Flight Centre’s Ignite business this month is in line with the amount made in October 2019.
Additionally, Australian interest in travelling to the United Kingdom, United States, and Fiji has increased by multiples of 6, 11, and 20 respectively over the last month.
As The Motley Fool Australia reported on Wednesday, sales through the company’s leisure and corporate travel arms are at 14% and 41% of pre-COVID levels respectively. Those figures need to reach 50% and 40% respectively before the company expects to break even.
Though, Turner believes that will be sooner rather than later. While he declined to give guidance, he commented that he expects the company will return to profitability this financial year.
He said in the post-COVID world, more people will likely seek out travel agents instead of going it alone.
Turner also said Flight Centre is a leaner, more efficient business than it was before the pandemic. That means it’s ready to respond to changes in the cycle quickly.
Finally, Flight Centre experienced a surge in demand when international borders reopened in the United States and South Africa. For that reason, it’s getting ready to see the same activity in Australia.
It’s now returning sales staff to full-time roles, creating ‘COVID support desks’, and enhancing its sales channels to reduce pressure on shop fronts.
Flight Centre share price snapshot
This week started off well for Flight Centre’s stock. Monday and Tuesday saw the Flight Centre share price gaining. Unfortunately, it took a turn for the worst and plummeted 4% on Wednesday and another 5% on Thursday.
It finished the week with a year-to-date gain of 26%.