Flight Centre has cracked a record $23.74bn in total transaction value for FY24, a $1.8bn year-on-year increase, as it continues to benefit from returning travel even amid the tough economic climate.

The ASX-listed travel giant reported $2.71bn in revenue, up from $2.28bn a year prior, and a 131% underlying profit before tax increase to $320m. Within this, leisure travel profits more than doubled over the year and hit their highest levels in 10 year (FY14). However corporate travel was also strong delivering more than $1bn year-on-year growth and achieving another record. Net profits came in at $139m, up from $47m in FY23. Overall margin on revenue was 11.4%.

Higher TTV was also achieved with higher productivity, and the group said it topped its FY19 sales record with 63% of its FY19 workforce, plus an expanding independent agent and agency network. Flight Centre is running expenses at about 15% below pre-covid levels currently.

Flight Centre did highlight several headwinds, however. Significant airfare deflation for example, saw average international economy fares sold in Australia during the second half 13% cheaper than during the previous corresponding period, partially offset by 10% growth in ticket sales. Flight Centre said it also saw increased basket sizes in various leisure brands.

A flat trading climate in the corporate sector globally late in the year was also noted, with industry-wide airfare sales data (MIDT–Market Information Data Transfer) pointing to minimal 2H volume growth.

FLT’s improved trading performance was reflected in strong cash generation, highlighted by a record $421m operating cash inflow. In light of this strong cash position, almost $450m in capital management initiatives were undertaken during FY24 as the company including reducing bank debt to $100m by repaying $252m, cutting back overdraft facilities by almost $50million, completing an $84m buy-back, and returning $62m in fully franked dividend payments to shareholders.

“In an uncertain macro-economic and geopolitical climate, our business and the industry in general continued to grow –once again highlighting the sector’s resilience and our strength as a diversified global travel company,” Flight Centre managing director Graham Turner said.

“We recorded circa$1.8billion YOY TTV growth and surpassed our record FY19 result –with a substantially leaner workforce and a structurally lower cost base, highlighting the strong productivity gains we have delivered in both leisure and corporate travel.

“Our YOY growth was also achieved in a deflationary airfare environment, which saw average international economy airfares decrease by 6% globally and by 13% in Australia during the 2H.While this long-awaited deflation will impact short-term TTV growth rates, we view it as extremely positive given it makes travel more affordable for families in particular and is likely to drive volume growth into FY25.”

Importantly, Turner said Flight Centre had strengthened foundations for the future by investing in key growth drivers, including its people: Staff retention has improved and FLT was recognised as a Great Place To Work in 25 countries during FY24. Technology and systems to enhance productivity and the customer experience are also in the group’s sights.

“Looking ahead, we continue to focus on profitable growth and our target of returning to a 2% UPM for the first time since FY15.We see a clear path to 2% and aspire to achieve it during FY25 although it remains a stretch target within this timeframe,” Turner said.