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Discounting buffets Flight Centre net profit

February 27, 2017 Headline News No Comments Email Email

Flight Centre has seen its first half net profit drop 36%, a result it attributed to  “unprecedented airfare discounting.”

The group’s net profit for the six months ending 31 December 2016 was AUD 74.4 million, down from AUD 116.7 million in the previous corresponding period. Profit before tax was AUD 109.2 million, a fall from the AUD 156.8 million recorded previously.

Revenue slid marginally to AUD 1.251 billion, from AUD 1.258 billion on what the company called “airfare deflation”.

Flight Centre’s biggest market, Australia, saw total transaction value (TTV) grow by 5% to AUD 5.1 billion. That was largely due to strong growth in international and domestic flight sales.

Although first-half ticket sales rose strongly – especially in Australia – a 7% fall in average international fares and a 4% fall in domestic fares, triggered by heavy discounting, had an impact.

First-half earnings fell 10% for Australia.

The group revised guidance on underlying profit before tax down to between AUD 300 million and AUD 330 million.

Edited by William Sykes

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