And a solid update from Flight Centre Travel Group (FLT) yesterday with the annual meeting told that the company has “generally … performed in line with expectations” in the first four months the current financial year.
CEO Graham Turner told shareholders at the meeting in Brisbane that the company was sticking to its previous guidance for underlying profit before tax to climb by up to 8% for the full financial year.
Flight Centre has forecast its underlying profit before tax will rise between 4% to 8% this financial year to a range of $380 million – $395 million.
The more confident guidance stands in contrast to the two downgrades issued last year as the company battled through weak consumer confidence and the early impact of the slide in the value of the Australian dollar.
Mr Turner said yesterday that consumer confidence in Australia remains fairly subdued, with the outbound travel market growing at a slower rate than normal.
"Within our business, both leisure and corporate travel turnover has increased at a slightly higher rate than the outbound travel growth rate," he said.
"We are, of course, a lead indicator of outbound, given that we recognise our revenue when the customer has paid in full, which is obviously well before he or she travels and becomes an outbound departure statistic."
Mr Turner said the company’s UK and South African businesses had been performing well while losses in Canada had slightly decreased.
He said there were some positive signs in the Australian market, the company’s largest.
"Customer enquiry is solid and we continue to see cheap international airfares," Mr Turner said.
“For example, eight of the 10 fares that we are advertising on the flightcentre.com.au landing page this week are cheaper than the fares we advertised 12 months ago,” Mr Turner said told the meeting.
"The average saving across these 10 headline fares is 10.6 per cent. Secondly, airline capacity continues to increase on international routes and competition between the airlines is healthy, with some 50 airlines servicing Australia."
The shares edged up 0.5% to $36.98, after rising to well over $37 during the day.
