Flight Centre’s shares fell nearly 20% on Friday after the company issued a cautious outlook for FY25, signaling investor concerns about a potential slowdown in the travel sector.
In its latest update, the travel giant noted that while trading was slightly above last year’s figures, profits were expected to be “heavily second-half weighted.” The company also highlighted inconsistent trends in the first quarter and challenges from airfare deflation, alongside a lagging recovery in corporate travel.
The announcement came amid broader market jitters, following Web Travel Group’s warning of a ‘subdued’ start to the year, which had already sent its shares tumbling by 32%. Analysts interpreted Flight Centre’s lack of solid earnings guidance as a signal that profit expectations for the year may be weaker than anticipated.
The company’s shift towards corporate travel, which has been slower to bounce back compared to leisure travel, and declining total transaction volumes following a normalization of airfares, contributed to the market’s concerns. Despite the company’s optimism about long-term growth and strategic investments, the disappointing update raised fears about its near-term profitability prospects, triggering the sharp sell-off.