Is the Flight Centre share price a buy ahead of Thursday's FY 2022 earnings report?

Flight Centre saw a much stronger second half as travel numbers picked up pace.

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Key points
  • Flight Centre reports its full year results on Thursday, 25 August
  • The company’s recent trading update reveals a likely large FY22 EBIDTA loss, but well above FY21's losses
  • Global air travel is expected to rebound to 85% of pre-COVID levels for 2022

The Flight Centre Travel Group Ltd (ASX: FLT) share price is down 1.39% during early afternoon trade on Tuesday.

Flight Centre shares closed yesterday trading for $17.24 each and are currently trading for $17.00.

With the Flight Centre share price down 4.8% over the past five days, is it a buy ahead of Thursday's 2022 fiscal year earnings report?

A woman ponders a question as she puts money into a piggy bank with a model plane and suitcase nearby.

Image source: Getty Images

FY 2022 earnings expected to remain negative

While earnings are expected to remain deep in the red for FY 2022, much of those pending results are likely already reflected in the Flight Centre share price.

The company released a trading update on 25 July, revealing it expects an earnings before income, taxes, depreciation, and amortisation (EBITDA) loss in the range of $180 million and $190 million for FY 2022.

While that's still a hefty loss, it's a big step up from the $337.9 million EBITDA loss posted in FY 2021.

According to Flight Centre, the improved outlook came from a much stronger second half.

Flight Centre share price could get a lift from travel rebound

While travel numbers remain below their pre-pandemic levels, travellers are returning at a rapid pace.

That could offer a boost to the Flight Centre share price in the wake of its FY 2022 results, which would make now a good time for investors to consider adding some of the stock to their portfolios.

According to Felicity Burke, consulting general manager at Flight Centre's FCM Consulting (courtesy of The Australian):

We're seeing an upward tick in aviation globally with the second quarter showing a steady monthly growth in seats offered, down 23% when compared to the same time-period pre-COVID.

As demand continues to increase across the world, we can now forecast that for the calendar year ending 2022, global seat availability will be back to 85% of pre-COVID levels, a bounce back that signifies the pent-up demand for people wanting to travel for both business and leisure.

Domestic air travel is expected to rebound to 83% of pre-COVID levels for the full 2022 year.

Flight Centre share price snapshot

Despite a big retrace since early May, the Flight Centre share price remains up 20% so far in 2022. That compares to a year-to-date loss of 8% posted by the S&P/ASX 200 Index (ASX: XJO).

Motley Fool contributor Bernd Struben has no position in any of the stocks mentioned. The Motley Fool Australia's parent company Motley Fool Holdings Inc. has no position in any of the stocks mentioned. The Motley Fool Australia has recommended Flight Centre Travel Group Limited. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

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