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Flight Centre upgrades full year forecast


Flight Centre has upgraded its full year profit guidance due primarily to the continuing robust market for corporate travel.

The travel agency group expects its profit before tax for the year to June 30 at between $285 million and $290 million, as much as 18 per cent higher than the previous corresponding year.

Flight Centre had initially forecast profit before tax of between $265 million and $275 million for the 2011/12 financial year.

Managing director Graham Turner said Flight Centre did not experience the same sales slowdown as retailers in some discretionary sectors but that leisure travellers were becoming more cautious.

"A lot of our expertise is helping corporates save money on their travel spend and we're reasonably big in the mining sector, so that side is going okay but leisure is not getting easier from what we can see," he said.

While overseas travel had been strong in the past few years due to the strong Australian dollar, Mr Turner said that sector was expected to slow and domestic travel to increase.

"You can't get that sort of growth in international travel year on year forever, so I would predict that to slow down a bit.

"But I think that will be picked up a bit by a stronger domestic leisure market," he said.

Internationally, Fiji, Bali, Phuket, London, Los Angeles and New York were the most popular destinations, he said.

Flight Centre had been operating online for some time but Mr Turner said it was still only a small part of the business.

He said the company was looking at an online model where customers could book online but still speak to travel agent.

Mr Turner said he was not concerned about the carbon tax having much affect on his business.

"Of all the problems our industry has got, I don't think this particular tax will have a lot of impact," he said.

"We've got a lot of red tape and bureaucracy in our industry, now that is probably much more expensive and damaging for us than the carbon tax."

Mr Turner said the company's growing presence in international markets has provided a buffer from downturns in particular regions.

Flight Centre was up $1.21, or 6.28 per cent, at $20.49 on Thursday.