Travel agency Fight Centre has narrowed its forecast loss for the year to June in a trading update issued Monday, a month or so it before it reveals its full 2021-22 figures.
The company told the ASX that it now expects a full-year underlying loss of between $180 million and $190 million, down from previous predictions of losses between $195 million and $225 million.
Flight Centre’s improvement has echoes of the rebound in activity, revenue and cash flows reported by Qantas in recent months, especially for the June 30 half year.
The shares jumped 35 to $17.62 by the close Monday.
CEO Graham Turner said in the statement that while the airline sector faced ongoing challenges for at the next six to 12 months, “the bounce-back in demand for corporate and leisure travel had happened faster than the company had been expecting”.
“The scale of our recovery exceeded our initial expectations and meant that we should now exceed our preliminary FY22 result target, with early trading results pointing to a breakeven second half result and a healthy fourth quarter profit (underlying EBITDA),” he said.
Flight Centre said the total transaction value of flights booked through its networks had reached the $10 billion mark for 2022, more than double the $3.95 billion that Flight Centre processed in Covid hammered 2020-21.
The increase is due to both increased demand for flights and higher prices for a range of routes as air travel slowly recovered as national borders re-opened.
“[Total transaction value] recovery has, to date, been fuelled by both an uplift in demand and higher than normal ticket prices linked to a lack of airline capacity, particularly on international routes,” the company said in an update to investors.
While the company will still post a loss for the year, it expects to break even on an underlying earnings basis for the second six months of the year.
Flight Centre has been preparing for a post-COVID travel bounce-back for months.
In June, it confirmed it was extending its staff share rights plan in a $30 million bid to retain its workers ahead of the rebound.
