Company Interview / Flight Centre facing turbulence but confident of clearer skies ahead

Key Points:

Flight Centre (ASX:FLT) profit slips amid geopolitical headwinds, but maintains full-year dividendGrowth expected in Asian markets and inbound travel to AustraliaCorporate traveller business poised for significant expansionCost control, AI-led efficiencies, and capital management remain focus areas

Flight Centre (ASX:FLT) has reported a slight decrease in statutory profit to $213 million for the fiscal year, with CEO Graham Turner attributing the downturn mainly to a weak fourth quarter influenced by geopolitical tensions and non-recurring costs in Asia. Turner states that travel demand was impacted by escalating issues in the Middle East and reduced outbound travel from Australia to the US. Despite these challenges, Flight Centre’s earnings outpaced the previous year up to the third quarter, before dropping sharply in the final months of FY25. A final dividend of $0.29 per share has been declared, bringing the full-year payout to $0.40.

Turner expects cyclical headwinds to persist into FY26, but believes cost cuts and AI initiatives will help ease the effects. He highlights recovery signs, particularly in Asian travel markets such as Japan, China, Vietnam, and Bali, which offer better value for Australians than the US. Turner says domestic tourism remains solid and inbound international travel to Australia is increasing, with Australia seen as a strong value destination.

Corporate travel is another bright spot, with Turner's expectation that the corporate traveller business could reach $5 billion in annual total transaction value. Significant capital management moves, including share buybacks and convertible note repayments, have been undertaken to strengthen the company, and Turner anticipates consistency in dividend payments moving forward.