Flight Centre Travel Group has cut its growth expectations for its 2025 fiscal year - partly due to US policies on trade and immigration - although its corporate business remains generally solid, the company said in a filing with the Australian Securities Exchange (ASX) on Monday (28 April).
The group, which owns TMC brands such as FCM and Corporate Traveller, said US trade policy and increased scrutiny for arriving visitors have "exacerbated the volatile trading conditions experienced throughout the year”.
Flight Centre said in its ASX filing that it “remains on track to deliver record total transaction value (TTV)” in the current financial year, which runs to 30 June.
But the company added that “the prospect of this current uncertainty” continuing into its busiest trading months of May and June meant it was unlikely to deliver the growth needed to achieve its previous pre-tax profit target of AU$365 million to AU$405 million (US$234.8 million to US$260.5 million) in the current financial year.
The firm now expects its pre-tax profit to range between AU$300 million and AU$335 million (US$192.9 million to US$215.5 million), according to the filing.
Even with this adjustment, Flight Centre noted its "corporate business continues to trade solidly in most regions," and it expects trading conditions to stabilise in the 2026 fiscal year for "stronger overall results".
Flight Centre managing director Graham Turner added in a statement: “Our corporate business is now materially larger than it was pre-Covid, its offerings are resonating strongly with customers and productivity gains of 15 to 20 per cent are expected between [fiscal years] 2024 and 2026 if the business achieves its targets.
“In addition, the account pipeline is strong, given FCM alone has already secured new contracted accounts with projected annual spends of more than AU$1 billion during fiscal year 2025.”
Flight Centre already had announced plans to reduce full-time employees in its corporate business by 5 per cent year-on-year by the end of the 2025 fiscal year, largely through attrition, and that reduction is "on track," according to the group.
The group has instituted a recruitment freeze across its other businesses and is looking to cut back largely in non-customer-facing areas.
The group also said it plans to invest about AU$25 million (US$16.1 million) in TPConnects this year "to introduce a broader range of capabilities and functionality that will decrease the business' reliance on third-party systems."