The Flight Centre Travel Group Ltd (ASX: FLT) share price has been on the mends this year, following a disastrous 2020. The travel agent is set to return to leisure and corporate profitability as market conditions improve.
At Wednesday's closing bell, Flight Centre shares ended the day up 2.30% to $20.01. This means that its shares have now accelerated 31% since hitting a low of $13.74 in mid-August.
Passengers gear up for international travel
Overseas holidays without the need to quarantine for fully-vaccinated passengers are expected to soon be a reality. This has had a profound impact on the Flight Centre share price, sending it to the mid-point of pre-COVID-19 levels.
The company held its annual general meeting (AGM) last week, highlighting demand for overseas travel. Leisure enquiries and quotes have surged for key locations as people look to book a much-needed holiday.
Fully-vaccinated passengers are offered more freedoms in travelling across Trans-Atlantic and other international destinations. For example, United States travellers can fly to the United Kingdom, and Fiji is opening its borders to vaccinated passengers from November.
Flight Centre said that more countries are accepting to live with the virus, with various international routes restarting.
The company is targeting a return to monthly profitability during FY22. However, this is based on the expectation that international travel continues to gradually return and Australian domestic borders remain open.
Sales revenue increased month-on-month. In particular, leisure and corporate recovery in the United States during Q4 FY21 ticked up a notch. Flight Centre noted that corporate transaction numbers were at 50% before COVID-19, representing around 40% of total transaction value (TTV).
Coupled with its leaner and more efficient cost base model, this is expected to provide bumper profits over the long term.
Flight Centre share price summary
Over the past 12 months, Flight Centre shares have soared almost 60%, with year-to-date up around 26%. A strong recovery forecasted in the travel sector led the company's shares to touch an 18-month high of $25.28 on 5 October.
Flight Centre has a market capitalisation of roughly $3.99 billion, with close to 200 million shares on its registry.
