Flight Centre's global managing director Andrew Stark discusses the evolving travel outlook and global travel cost trends.
Video / NZ Herald
Tom Walley became the face of Flight Centre as its ‘Captain’ in the depths of the pandemic in April 2021.
The qualified pilot is in adverts all over the world promoting the company, and driving around Brisbane where he lives now it seems he’s everywhere as the company rides thetravel boom.
‘’I can’t drive anywhere without seeing my noggin - my kids love it,’’ he said.
His other day job is global managing director of Corporate Traveller, of Flight Centre Travel Group, and his division with more than $4.5 billion of sales makes up about a fifth of the wider company’s total transaction value of $22b.
In the past year, revenue for Corporate Traveller has grown by close to $1b, Walley said during a visit to Auckland last week.
What some feared may be a temporary post-pandemic “sugar rush” has continued for Corporate Traveller, whose clients are small and medium size enterprises (SMEs).
Tom Walley is in adverts all over the world.
The other corporate travel business in the Flight Centre group, FCM, targets big companies and government contracts.
Walley was rated to fly twin-engine turboprops and was an instructor in Perth when he flew to London to apply for a job at British Airways.
‘’Then, 9/11 happened and they stopped hiring pilots. I was at a bit of a dead end and ended up applying for Flight Centre which I thought I’d do for just a while. I never found a flying job so I never left.’’
He’s worked throughout the business, taking over as global boss of Corporate Traveller early last year.
‘’We’ve had it for 30 years. It was born out of the Flight Centre brand in Melbourne, with a portfolio of smallish spending customers. It was a dedicated consultant model and then over time we’ve expanded into other countries.’’
It is in six countries including New Zealand and around the world and employs 1000 consultants and 500 support staff.
‘’It’s a reasonably small number of people for the output it does and the big growth markets for us are the US and the UK.”
But he said New Zealand was performing very well.
Nearly all corporate travel halted during the depths of Covid but has bounced back strongly despite increased use of technology such as Zoom to cut travel.
‘’There’s no question that virtual meetings are part of most people’s life now but you’d be surprised how many people who struggle to get stuff done when you are not face -to- face,’’ he said.
‘’What surprised us and continues to surprise us is just how dramatically the travel demand came back post-Covid. We were nervous initially that it would be a sugar rush and they’d go on just one trip.
“Support staff – such as IT workers - like the it guy who would pop to Sydney to fix a computer.
“But fundamentally globally that return to travel, which has been a good two years now has really stuck and continues to grow as (airline) capacity is coming back online.’’
Businesses were becoming increasingly frustrated with high air fares but they are showing signs of moderating.
‘’Air fares are definitely coming off. If I look at Australia, for example you’re now able to travel to Europe at the front of the plane for sometimes less than $10,000 (return in Business) which is great because it was only six months ago it was $15,000.’’
The latest quarterly trend report from FCM shows that in Australia and New Zealand, Economy fares rose 22 per cent between 2019 and 2023 and Business fares went up 26 per cent.
Fuel, cost recovery, sustainability commitments and fleet upgrades will continue to push up fares in 2024 by between 3 per cent and 7 per cent in 2024, FCM says.
Hotel rates are also forecast to keep climbing by between 3 per cent and 8 per cent.
