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Money in travel as Flight Centre and JTG pull in profits

September 2, 2013 Corporate, Headline News No Comments Email Email

egtmedia59Australia’s biggest travel agency chain, Flight Centre, has made a record profit and Qantas-backed Jetset Travelworld is profitable as well.

The results are encouraging for the industry, confirming once again that you can turn a profit selling travel in the internet age.

Not that profit falls evenly. Corporate spend appears still to be down, more or less across the board for the industry. GOOGLE_DISPLAY_WEB_ADS

Flight Centre posted an impressive 23% rise in annual net profit to AUD 246 million for the 2012/13 year – which was even better than expected, with double-digit earnings growth looking likely in the year ahead. Flight Centre forecasts a rise of between 8% and 12% in pre-tax earnings for the new financial year, up to AUD 385 million.

The 2012/13 result, according to the Melbourne Age, will see Flight Centre managing director Graham Turner pocket a dividend for the year of almost AUD 21 million. That beats his salary package of AUD 883,304.

Turner said Australian leisure travel business performed strongly – especially in the second half.  Corporate travel results were softer.

Pre-tax earnings from Flight Centre’s UK business (its second largest after Australia) have doubled over the past two years to AUD 32 million.

MEANWHILE, an improved result from the Jetset Travelworld Group (JTG) has seen pre-tax profit rise by 88% to AUD 27 million, on the back of an 8% fall in turnover and revenue. Net profit after tax was AUD 16.5 million.

The results reflect a continued focus on “margin management, cost reduction and efficiency measures”, chief executive Rob Gurney said. Corporate business remains challenging, with turnover at JTG’s corporate arm, QBT, falling 17% as government travel weakened.

Gurney estimates the cost of launching helloworld, JTG’s new retail brand, could hit AUD 50 million over the next 12 to 18 months. He says the period of engagement over helloworld is progressing well with franchisees and members. JTG expects to begin store rebranding in October.

Written by : Peter Needham

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