Flight Centre isn't expecting a quick rebound after having to twice downgrade its earnings forecasts in the past few months, but hopes interest rate cuts will spur travel momentum in 2026.
The online travel agency on Wednesday delivered a $289.1 million underlying profit before tax, in line with revised expectations but far less than the $365 million to $405 million it had forecast in November and reaffirmed in February.
Flight Centre said its peak fourth-quarter trading had been impacted by escalating Middle East tensions and a global downturn in leisure travel to the US, where there have been a number of high-profile incidents of tourists encountering problems with border authorities.
"After two years of strong recovery post-COVID, FY25 proved to be a more challenging trading period," said managing director Graham Turner.
Flight Centre said it expected the cyclical challenges that affected its 2024/25 results would continue to impact booking and travel patterns in 2025/26, forecasting its first-half profit would be "reasonably flat".
But the travel group expects accelerated profit growth in the second half as the trading cycle improves, with the prospects of further rate cuts in some nations helping to alleviate cost-of-living pressures and boosting consumer confidence.
There's been early signs of stabilisation including improvement in some key consumer confidence metrics, Flight Centre said.
The company has high hopes for a new leisure loyalty program it will unveil later in 2025.
Flight Centre said the program will also span Travel Associated and Cruiseabout in Australia, and will reward customers across the entire travel journey with the most accessible and diverse redemption options in the market.
In early afternoon trading FLT shares were down 2.8 per cent to $12.57.
