Full Year 2026 Flight Centre Travel Group Ltd Earnings Call
Speaker #1: Yeah, it wasn't a game of too hard, this one. It was a story of three strong quarters followed by one quarter, of pretty significant disruption.
Speaker #1: Today we're joined by the usual crowd. We've got Adam, the CFO and CEO of GBS; Chris Galanty, the corporate CEO; James, James Kavanagh, or JK, the leisure CEO; and Screw, our CEO and MD.
Speaker #1: Greg Parker, our supply CEO, is also here in the room and will join us for the Q&A. I'll now hand over to Adam.
Speaker #2: thank you, Hado. and welcome to everyone who's joined us on the call this morning. actually, can I just start by saying that whilst our underlying profit for the year was obviously a disappointing result, there's actually a lot to like about the year that we've just completed.
Speaker #2: TTV, statutory PBT, underlying EBITDA, profit after tax, earnings per share, overall cost reductions through the second half, and record NPS for our brands were all positive metrics.
Speaker #2: And the Screw will talk to you later on the call. We've had a reasonably good start to FY27, particularly in leisure. Throughout the year, we've also continued to deploy initiatives to create shareholder value across capital capital management, portfolio optimization, and a number of operational strategic initiatives.
Speaker #2: Since March, all of our businesses have, however, been impacted by the war in the Middle East. Primarily, our leisure brands, but our corporate and touring brands were also affected.
Speaker #2: Before we delve further into those areas, I'd like to set a couple of minutes just reinforcing the company's unique strengths and defensible moat. The nature of our large, diversified company is a truly unique and valuable asset.
Speaker #2: As you'll see on slide 5, our size and structure allows us to combine the economies of scale of a global enterprise with the customer intimacy of focused expert brands.
Speaker #2: And we believe that combination is not just rare, but also extremely difficult, if not impossible, for our competitors to replicate. And what that means in practical terms is that we can navigate complexity and provide expertise for our customers where it truly adds value, that we can reach those customers that our supply partners struggle to access, but who they do value very highly.
Speaker #2: It also means that our brand and geographic diversity provide a natural hedge in times of crisis or market disruption, and it means that we can utilize our global business services platform to support top-line growth without a proportionate increase in cost.
Speaker #2: Something that we saw in the second half with underlying costs decreasing year on year, whilst TTV continued to grow. Hopefully, many of you will know that our purpose is to open up the world for those who want to see.
Speaker #2: Again, practically, what this means for our customers is that we can provide expert-led end-to-end travel that turns complexity and anxiety into confidence for them.
Speaker #2: And we can see this in our NPS results. For our people, it means that we can provide them with a career that spans brands, disciplines, and geographies.
Speaker #2: It's somewhere to build a life and not just a job. And again, we can see this in the longevity of our teams. And for our supply partners, we can provide access to highly valued customers, global buying power, and a trusted long-term partner.
Speaker #2: And once again, we can see this evidenced particularly in times such as we've seen over the last few months. And our view is that if we look after our customers, our people, and our partners, then our shareholders will undoubtedly be the beneficiaries.
Speaker #2: So building off all of that, on slide 7, you'll see the core elements of what we consider to be our defensible moat. Our supplier relationships, the human expertise to navigate through complexity, backed by differentiated proprietary travel and tech platforms, and product ranges.
Speaker #2: Brand equity and trust have been built over decades in the industry. And finally, customer loyalty and proprietary data. All of these elements are powerful in their own right, but collectively they form a strong and effective defensible moat for the company.
Speaker #2: I'll just highlight that on slide 8, we've got a summary of some of the key strategic initiatives that we're focused on as a company.
Speaker #2: I'll let Chris talk to productive operations, our investment in rapidly growing corporate traveler, in our key markets, and the corporate product suite. And JK to talk to World 360 and our investments in the cruise and luxury sectors.
Speaker #2: We continue to invest in TP of airfares for our customers and our consultants, through aggregated GDS, LCC, and NDC content, and the benefits of this investment are certainly being seen in the corporate and leisure brands.
Speaker #2: Obviously, as a company, we also continue to strategically invest in and utilize AI to enhance our customer experience, to increase productivity and efficiencies, and to generate new revenue growth opportunities.
Speaker #2: As mentioned earlier, our results have been heavily impacted by the war in the Middle East. And on slide 10, you can see this impact fairly clearly.
Speaker #2: In the third quarter, and in particular January and February, we really started to see profit and margin trends pick up. And at the end of March, we considered that we were comfortably on track, for the upper end of guidance.
Speaker #2: We saw around $60 million in FY26 profit impact in our leisure brands alone from the Middle East war. As well as significant impact to our touring brands as you can see in the HQ segment results in Appendix 5.
Speaker #2: Our corporate brands were also impacted. But the impact has been masked somewhat by the productivity improvements seen in the business and the recovery in the Asia region.
Speaker #2: As you can see on slide 11, year-to-year profit comparisons are also negatively impacted by $5 million FX on translation, and the exclusion of the petal profit share in the current year.
Speaker #2: Although the prior year includes a $3 million contribution. Even with the impacts of the war, underlying EBITDA increased by 4% year on year, which is a great result, but this growth didn't flow through to underlying PBT given the $16 million increase in net interest expense.
Speaker #2: Before handing over to Chris, I'll just highlight the work done on capital management this year, with the buyback of $200 million or just over 7% of our share capital, and a new up to $200 million buyback announced.
Speaker #2: The proactive management of our convertible note balances, and increased dividend payments. These all reflect the strength of our balance sheet and our belief in the business.
Speaker #2: At the same time, as noted on slide 14, we've proactively managed our portfolio of brands, with the divestment of Cross Hotels and our share of the Petal Group.
Speaker #2: The acquisition of Igloo and Fresh, the investment in Block Sky, and organic expansion across loyalty, touring, luxury, travel money, and digital commerce. We've got a close eye on our short-term results and shareholder returns.
Speaker #2: But this is balanced with a longer-term view that will ensure that we continue to meet and exceed our customer, people, and supplier partner expectations in an ever-changing market.
Speaker #2: I'll now hand over to Chris.
Speaker #3: Thanks, Adam. I'm pleased to say we delivered some very good results in our corporate business last year. In line with our long-term strategy of grow-to-win, we delivered record TTV and revenue.
Speaker #3: Our TTV in constant currency was up 5%, though slightly lower in Australian dollars due to the exchange rate. Revenue growth exceeded that, and pleasingly, due to very good productivity gains, we've been working on for a number of years, underlying PBT was up 28% to $240 million.
Speaker #3: This was despite various headwinds in the market. The Middle East conflict, obviously being the most notable, and impacting many of our businesses, particularly those in Asia, the Middle East, Africa, and some of our European businesses as well.
Speaker #3: We had some very strong winds in SCM, which were heavily second-half weighted, and we're in the process of implementing these customers now. The pipeline in SCM is very strong at the moment, with lots of RFPs coming out across many of our core markets.
Speaker #3: I'm pleased to say we had a very strong performance in our US markets, with corporate TTV exceeding $2 billion for the first time, up 10% in local currency.
Speaker #3: And this is the world's largest travel market, where despite our strong growth, we have a very small market share and a very large runway for further growth.
Speaker #3: Also, our global corporate traveler business achieved its target of reaching $5 billion TTV for the first time, and congratulations to our Australian New Zealand business, which had a record year in TTV and profit, further entrenching our number one position in the market.
Speaker #4: A lot of this growth in profitability has come through gains in productivity. We've used the term productive operations to describe a transformation of our business over the last couple of years.
Speaker #4: Pleasingly, if you look at the measure of TTV per travel consultant, it's up 34% since 2023.
Speaker #3: This is due to transforming our operating systems and progress towards a single global operating model, which is driven great automation, greater levels of productivity by integrating our proprietary customer digital platforms with our consultant platforms, to give a much more seamless experience.
Speaker #3: We've empowered our customers to self-serve far more than they could before, meaning faster responses, more personalized service, and lower human intervention, when it doesn't add value.
Speaker #3: However, what's really important when we talk about productivity gains is that our customer experience improvements have moved in lockstep. We've actually seen record SLA, record NPS, and record CSAT scores across our business this year.
Speaker #3: So productivity for us is about improving the customer experience alongside improving our operating performance. I also want to stress that these gains are structural, not one-off.
Speaker #3: As we grow and add more customers around the world, we expect these gains to continue. And importantly, the cost of productive operations is now simply part of our normal cost base.
Speaker #3: I do want to call out corporate traveler this year, as I think they were the star of the show. CT is our SME offering, and its customer proposition is simple.
Speaker #3: It's the only global TMC entirely built around and dedicated to the SME customer. We have a unique position in the market, combining fantastic proprietary specially designed product called Melon, with a dedicated travel consultant per customer.
Speaker #3: This means customers don't need to compromise. They get the best modern technology with dedicated personal service, via our online and offline channels, and they get the widest access to content and savings thanks to flights and buying power.
Speaker #3: We're also introducing a payment solution, Melon Pay, or CT Pay, in the Southern Hemisphere, and a meetings and events solution, which are both being requested by our customers.
Speaker #3: We continue to focus on organic growth in corporate traveler. CT delivered 8% growth in AUD, which is actually 13% in constant currency. Again, the Aussie dollar strengthening, reduces the percentage growth since most of our CT business now comes from outside Australia.
Speaker #3: I'm particularly pleased with the growth in North America, both Canada and the US. Huge markets, where we have a small market share and a great opportunity for growth.
Speaker #3: And where the combination of Melon and our consultants is winning. We will be investing more in growing key locations, such as New York, London, Toronto, Montreal, as well as many other large cities across North America and the UK.
Speaker #3: We're also accelerating into new verticals within the brand. Meetings and events, energy and marine, performance travel, and VIP. This is about taking our personalized technology and our personalized offline model and specializing ourselves and marketing to these verticals.
Speaker #3: These are demanding verticals, which generate higher margins and areas we're already very good at serving. The productivity gains I described earlier have been very important to CT's profit success.
Speaker #3: CT TTV is now 50% higher than pre-COVID, with 35% fewer consultants. And record NPS scores. It's a really good business transformation story. And Melon booking product launched a few years ago in the Northern Hemisphere, now makes up virtually all of our new business, and is by far our largest product in these markets.
Speaker #3: And we'll see more volume migrate onto Melon from longstanding customers this year. Something I've spoken about before and want to reiterate today: we're consolidating three previously fragmented areas of our offering into one modern, seamless digital experience for customers.
Speaker #3: This is about solving more problems for customers and therefore generating more revenue for our business. The three areas are travel management, meetings and events, and professional service.
Speaker #3: Meetings and events and professional services now make up 11% of our revenue, up 2% of points year on year. And we intend to grow that meaningfully over the next few years.
Speaker #3: There are three key benefits in this strategy. First, better personalization. The more customers use our products, and services, the deeper and richer our data meaning we can give customers a better more personalized experience, because we understand them better.
Speaker #3: Second, deep integration makes the customer relationship stickier and makes us harder to replace, because we provide an end-to-end solution and solve more problems for the customer, reducing their need to look elsewhere.
Speaker #3: This is especially valuable for SME customers who often don't have a dedicated executive for meetings, events, travel management, or professional services. We become their all-in-one solution.
Speaker #3: And third, the more the customers use us, the more they save. And the greater our commercial return. CT and SDN are in a very good sweet spot in the market, competing with the digital disruptors on product, while differentiating through the combination of great technology, great people, and an end-to-end solution across travel management, meetings, events, and professional services.
Speaker #3: Our real opportunity in corporate now is growth. We've invested a lot of time and money, last year, on productivity, transforming our business, and we now need to focus more on aggressively taking this fantastic new proposition to market and winning more customers.
Speaker #3: The starting point is our proprietary digital experience using our own products, SDN booking and Melon, to give a best-in-market, unique experience to customers. And integrating AI with both our products and our people.
Speaker #3: We call our AI intelligence layer SAM in SDN, and MEL in corporate traveler. They enable us to give customers a more personalized, more automated experience, while streamlining our cost base through greater automation and making our people more productive.
Speaker #3: I'm genuinely excited about what we're doing with AI. A lot of it is industry leading, and that's what we're hearing from our customers. It's important to note that although we have two brands and specialized businesses within those brands, we operate under a clear philosophy in corporate.
Speaker #3: Build once, use at scale. Everything we now build, our data and reporting, our proprietary product, our AI solutions, etc., is built once at corporate level, and used across both brands in all markets.
Speaker #3: That gives us real economies of scale. So in summary, a good year, but we now need to focus more on growth. We need to bring our products and services to a wider range of customers.
Speaker #3: And I want to be very clear: we will be investing more this year and the year after in growth. In sales, in marketing, in being present and talking to customers than we ever have before.
Speaker #3: To finish, I'd like to thank all of our customers and our fantastic people. And now I'll hand over to JK to give an update on our leisure business.
Speaker #1: Thanks, Chris. And hi to everybody. I will briefly cover the leisure results, including what changed in the fourth quarter, how our people responded, and where we see value ahead.
Speaker #1: So through the first nine months, leisure was performing relatively strong. And at the end of March, underlying PBT was 136 million, which is ahead of the same point in the prior year.
Speaker #1: We entered the fourth quarter, and we're on track to exceed our previous TTV high and deliver a record result. But ultimately, the year closed at 7.4% up to 12.6 billion in TTV.
Speaker #1: Igloo was acquired in December 2025 and contributed approximately half of this growth, about 500 million, while organic growth was up around 3%. The final underlying profit before tax was 139 million.
Speaker #1: And the difference between our trajectory and this was one highly abnormal quarter. So on the next slide, you can see Q4 is where the year really changed.
Speaker #1: It's normally the largest profit quarter for leisure. And an FY25 that contributed approximately 45 million of underlying PBT. Whereas quarter four, in FY26, was approximately 2 million in profit, with April and June delivering losses, our first unprofitable months since the pandemic in 2022.
Speaker #1: The Middle East war disrupted major aviation hubs, slowed bookings, and triggered approximately 250 million in refunds. And we estimate that the total impact on leisure was approximately 60 million, which includes a range of repatriation costs and other affected numbers at that point.
Speaker #1: So without it, we would have delivered around 200 million of underlying PBT. But encouragingly, as we start the new financial year, July has started reasonably well.
Speaker #1: And what we saw was inquiry was certainly coming through, but we started to see a lot of conversion occur in the month of July.
Speaker #1: And in that month, we delivered a record TTV month starting the year well. The next slide will talk about our three big moves. And this disruption has certainly not changed our strategy.
Speaker #1: Where we're focused on three big moves across number one, growing the core, which restores customer growth and productivity across Flight Centre. Betting on winners, scales the businesses that can diversify our earnings, and embed and enlisting loyalty increases customer frequency, and creates new partner-funded revenue.
Speaker #1: AI accelerates all three, and we recently launched an AI accelerator that will help our people convert more inquiries to serve customers faster, and operate more productively.
Speaker #1: And you'll see a slide included in the pack that will show how we're building up an agentic customer journey experience across the entire customer journey.
Speaker #1: On the next slide, we look at growing the core. And Flight Centre remains our largest leisure business and our largest earnings opportunity. Last year, we added consultants and store capacity ahead of the growth we expected.
Speaker #1: When the war removed quarter four volume, we did not really receive the operating leverage from that investment. However, we still remain set up to do so.
Speaker #1: The customer value proposition is very strong, and it's strengthening. And Adam touched on record NPS, but we saw on the Flight Centre brand NPS increase 14 points to a record 63.
Speaker #1: And this is really exceptional when you consider that anything above 50 is really an excellent result. Growth in Flight Centre is coming from multiple channels.
Speaker #1: And Flightcentre.com grew 8% TTV, and it's nearing 1 billion in TTV with online profitability improving sharply. So our focus in this area remains win more customers, capture more of the trip, and increase productivity across the network to deliver underlying growth in earnings.
Speaker #1: Next slide talks a lot about betting on winners. And leisure is no longer dependent on one earnings engine. We now have scaled platforms across luxury, cruise, foreign exchange, independence, and digital.
Speaker #1: And I'll just call out a few key areas here that are really actually performed in the year that was. Scott Dunn, an acquisition we made a number of years ago, increased PBT, PBT by 20%, with the US business performing particularly strongly following our recent investment.
Speaker #1: The cruise category is now approaching 1.8 billion of annualized TTV, and it's expected to exceed 2 billion in FY27. Our assets across wholesale, digital, retail, and packaging position us as one of the world's leaders in this space.
Speaker #1: And we're now dominant in two of the top four markets. So on to travel money. Well, travel money grew 31% to approximately 1.6 billion.
Speaker #1: And wholesale and new category are a new channel that we launched a couple of years ago has really been a major contributor, albeit off lower margins.
Speaker #1: When we look at digital TTV, we grew about 17% to 1.8 billion. And this continues to be a large focus and investment area for our group.
Speaker #1: And independence grew about 36% across Australia, New Zealand, and South Africa, in profits. However, this was offset by our emerging markets in the US and Canadian operations.
Speaker #1: So our opportunity here is really to convert this scale that we've built across these platforms into stronger, more diversified earnings. And on the next slide, we'll talk about embedding and lifting loyalty.
Speaker #1: World 360 rewards customer loyalty program launched at the end of November, with free and paid tiers. So customers can earn points through our travel brands on all travel, which is quite unique in the travel industry.
Speaker #1: Along with earning, points with everyday shopping partners in food, fuel, health, and 350 retail brands. Plus, five financial partners, which we now have five banks live, along with a home lending service proposition.
Speaker #1: So then with this solution, you can redeem travel across any travel product that's available through three participating Flight Centre brands. Our customers can also accelerate and earn more points bonus points with a range of selected travel partners who pay to participate in the program.
Speaker #1: So what's really unique about this is that customers can actually fly any airline at all in the industry, earn points, stack rewards, double dips, triple dips, which is quite unique.
Speaker #1: We're now up around 600,000 members, and approximately 66% of sign-ups are either new or actually re-engaging with the Flight Centre group. And we are actually engaging and interacting with members who are young or young at heart, ranging across all different demographics.
Speaker #1: So for our company, what's really exciting about this is actually reaches new customer access, greater frequency, new partner-funded revenue, and rich data to be able to actually interact more with their customers.
Speaker #1: So it's a new program. It's still early days, but it's scaling rapidly, and we expect big things to come. So in closing, our focus now is on converting the recovery and scaling our growing customer ecosystem into stronger earnings.
Speaker #1: I'm really proud of how our people have responded through a very difficult Q4, and I'd like to take this opportunity to say thank you to everybody that actually navigated these turbulent times, but also congrats on a great month to start off the new financial year.
Speaker #1: Over to you, Scott.
Speaker #2: Thank you. Thank you very much. Yeah, good morning, everyone, and thanks for joining us. So today, I'll walk through where we stand heading into '27.
Speaker #2: The trading momentum we're seeing, how we're navigating the disruption in the Middle East, and the structural growth dividers that underpin our confidence in the years ahead.
Speaker #2: In terms of current trading, leisure momentum is building, as you've just heard. We posted a record July TDV that surpassed our 2019 peak. And our best profit result for July since 2015.
Speaker #2: I think this is a signal that we're returning to the healthy TDV and profit growth we're delivering during the third quarter of last year.
Speaker #2: Early in the new financial year, our key growth drivers include Flight Centre brand, the linked travel group, Ignite Travel, luxury travel collection, Scott Dunn, and Cruisabout, and each of these brands is contributing meaningfully to the recovery.
Speaker #2: We're also seeing a rebound in two of our most important outbound markets from Australia. After the prolonged tariff and immigration-related downturn, US sales have now returned to year-on-year growth for two straight months.
Speaker #2: Both in June and July, which is the first time we've seen that since financial year 2025. Thank you, Donald Trump, for that. Sales to the UK move back above prior year levels in July.
Speaker #2: A positive lead indicator ahead of our upcoming early-bird airfare sales. And the return of our travel expo program in Australia which comes in this October.
Speaker #2: At the same time, airfare pressure between Australia and the UK and Europe is stabilizing with premium Middle Eastern carriers sitting around the 2,500, 2,600 in fares returned fares in August and September departures.
Speaker #2: And that's based on late July pricing. On the corporate side, TDV 10 trends remain consistent with last year's fourth quarter, with the business delivering solid growth on a constant currency basis in July 2026, though Middle East instability continues, obviously, to affect businesses located within the region, which is mainly FCM, UAE, or the ones with heavy links to it, which is Asia, Europe, and the Middle East.
Speaker #2: Corporate results this year expected to be second half weighted, with first half profits likely to below prior year comparatives. Now, this reflects front-loaded investment in corporate travelers northern hemisphere expansion, secondly, productive operations employee costs, moving above the line into trading results, and current FX headwinds on profit translation.
Speaker #2: And also, the timing of recently won accounts that are starting to trade now. The business also has a large RFP pipeline globally, potentially unlocking further TDV growth late in the year and into the 2028 financial year.
Speaker #2: Importantly, our corporate customer base remains resilient. Around 80% of respondents to our state-of-the-market survey which was run in July and August expect to increase or maintain their travel budgets.
Speaker #2: Our SME customers through corporate traveler are even more upbeat, with about 83% planning to increase or at least hold their budgets. Elsewhere in the business, Flight Centre's travel group's headquarter segment is likely to continue to be impacted by increased net interest, but this should be offset by ongoing cost control and a return to normal profitability levels for operating businesses within that segment, particularly in the peak fourth quarter trading period, which is obviously at the end of this financial year.
Speaker #2: On the financial framework, we'll provide formal financial year 2027 guidance at our AGM in November, consistent with our normal practice. In the meantime, I'd note that the gap between statutory and underlying profit continues to narrow as productive operations and world 360 rewards move back into business as usual.
Speaker #2: Our response to the Middle East unrest has largely been built around five key actions. First, cost discipline, we're building on the momentum we established in 2026 financial year, halting discretionary spends, freezing support roles, and prioritizing our investment in capex.
Speaker #2: We're generally keeping costs fairly flat, which is a challenge in an inflationary environment. Secondly, we're looking to increase market share. During the peak period of unrest, we heavily promoted short to mid-tall international travel and domestic itineraries.
Speaker #2: Reinforcing our value proposition during a turbulent period with a renewed focus on UK and Europe as conditions stabilize on key transit routes. Thirdly, leveraging our supplier relationships to secure preferential content better pricing tiers and capacity commitments, all of which translate directly in a stronger unit economics.
Speaker #2: We're working very closely with the Middle Eastern carriers as they resume normal service. Fourthly, maintain balance sheet strength. We're well placed to capitalize on opportunities as the market moves into recovery.
Speaker #2: And fifthly, preparing for a rebound in demand as conditions stabilize. This would be in line with traditional trends and would underline just how resilient the outbound travel sector has proven to be.
Speaker #2: Now, alongside these five priorities, we continue to monitor the Eastern Middle East volatility and every any flow-on on macroeconomic impacts on both our leisure and corporate travel businesses.
Speaker #2: Some of our growth drivers. Stepping back from the near-term picture, I want to spend a moment on why we remain confident in the underlying growth story.
Speaker #2: And it's because TDV growth is what ultimately converts into disciplined profit growth. On the TDV side, we benefit from ongoing market growth by ATA, for example, expects 3.1 KGA in global passenger traffic between '24 and 2050.
Speaker #2: We're also expanding rapidly in key sectors, in leisure, that's cruise, tours, foreign exchange, and luxury. In corporates, it's meetings and events, and the UK and the USA SME businesses.
Speaker #2: We're growing our non-intermediary owned product businesses too. These businesses include our tour operators, backroads touring, and top deck, our destination management business, Discover, and our bike touring business, Grasshopper, and I expect that they're going to become a much larger part of our story in the future.
Speaker #2: Both through economic, both through organic growth, and through various acquisitions that we're looking at. We're expanding our addressable markets altogether, moving into new sectors, including payments, oil and gas, software as a service, loyalty, and host FX, as you've heard.
Speaker #2: On the profit side, we're focused on network and business optimization. Strengthening, adding discipline, and driving turnaround where needed. Our cost discipline is already showing results.
Speaker #2: We achieved a record low-cost margin of 9.5% in 2026 financial year, driven predominantly by cost initiatives. In global business services, as well as supply.
Speaker #2: We're capturing efficiency and productivity gains as scale benefits through flow-through productive operations, in both our corporate and business-as-usual initiatives. And we're investing in AI, embedding it into every role, every day, to create supercharged consultants across the business.
Speaker #2: In closing, to sum up, leisure momentum is building, travel to the US and UK appear to be rebounding, corporate travel remains resilient, even as results skewed in the second half, and our five-point plan gives us a playbook for navigating the Middle East disruption without losing sight of our long-term growth opportunities.
Speaker #2: We do, however, recognize there are also potential headwinds. Particularly the simmering geopolitical tensions conditions remain volatile in the Middle East, as well as in Ukraine, and we're now seeing the rising USA-Canada trade tensions.
Speaker #2: This means we have to be agile, and ready to respond to any challenges that arise. We'll have a clearer picture of the world at our AGM in November, and we'll provide financial year 2027 guidance then as usual.
Speaker #2: With that, I'll now hand over to questions. Thank you.
Speaker #1: Thank you. If you would like to ask a question, please press star one on your telephone keypad. If you would like to withdraw your question, simply press star one again.
Speaker #1: Your first question comes from Michael Simotas, with Jefferies. Your line is open.
Speaker #3: Good morning, everyone. First question from me is on leisure. I think slide 10 paints a very interesting picture, particularly when we look at your comments on July and the strength of both TTV and profitability in leisure.
Speaker #3: Based on what you're seeing now, customer inquiries, the results you've already got in the bank, if we don't have a deterioration in the geopolitical environment, is there any reason you won't claw back the majority of that $60 million headwind that you had in the FY26 year?
Speaker #2: Michael, it's J.K. here. We're reasonably optimistic about it. So long as we have, as you say, no geopolitical events that happen. And it's attributable to already investment that's been made in leisure over the last few years, including Scotland, Igloo, cruise, and then flight tender performance is lifting as well.
Speaker #2: So it is reasonably promising around that that inquiry is starting to convert. As we enter July, and also August has performed reasonably well too.
Speaker #2: But remember, we're two months in.
Speaker #3: Yep, that's fair. And then the second question, probably one for you, Chris, on corporate. The corporate business is not one that I've tended to worry about in the past, but I just want to understand the comments around the first half headwinds and if you could help us pick them apart.
Speaker #3: It looks like FX might be a five or six million dollar headwind at the PBT level for the business. Maybe you could give us a little bit more color around productive operations, costs that come above the line, and are you confident that you'll see growth on a full-year basis in that business?
Speaker #4: Hi, Michael. Yeah, look, I think the first half is a few things. One is FX, as you say. The other is the productive operations costs are now above the line.
Speaker #4: What we mean by that is that all the people who've been working on that project for the last couple of years, we are now absorbing those costs on a monthly basis.
Speaker #4: However, the work they're doing and the work they have done means as we grow and add top-line volume with new customer wins, we get much better returns on that volume because of the productivity gains.
Speaker #4: I think really also the wins that we had, as you can I think we released earlier that we had a very strong Q4 for wins.
Speaker #4: But all that in SCM, all that volume will be implemented over the next few months. And we'll really significantly hit our second half we've also had the strongest start to a new financial year in SCM over the last seven weeks in terms of wins.
Speaker #4: And again, all of that volume will really hit the second half. So we're expecting an increase in top-line over the second half. And because of what we've done with productive operations, that will flow through much more strongly in the second half.
Speaker #4: So it's certainly not feeling down about the first half, but we think we'll be much more second half weighted.
Speaker #2: And CT as well. From investors.
Speaker #3: And based on that. Based on that volume, you can see is that going to be enough to more than offset the full year of costs in productive ops that come into the business?
Speaker #4: Yeah, we think so at this stage. And as Adam just mentioned, sorry, that I forgot to mention that we're also heavily investing in growth, particularly in corporate travelers.
Speaker #4: So we're investing more in salespeople, in marketing, because that model is going really well. They had a record year last year, and we our team has sort of taken the view that whilst things are looking really good in terms of product-to-market fit for CT, we want to double down on growth investment.
Speaker #4: We're probably we've really focused on investing in productivity. We now want to invest in growth. So we'll be spending a lot more on our spending a lot more already on marketing and sales.
Speaker #3: Okay, thank you.
Speaker #1: Your next question comes from Ben Gilbert with Jordan. Your line is open.
Speaker #5: Good morning, team. Just on costs. You guys obviously did a great job through COVID consolidating and driving productivity, but it seems we're just not and I'm not standing in the Middle East disruption.
Speaker #5: It just doesn't seem like we're getting any benefit of that. And then to the point before, there's just more costs going back into the business.
Speaker #5: Do you think you're actually getting these productivity gains? Because we're just not seeing it in the numbers, and then you get a million bucks a month, whatever it is above the line for productive operations.
Speaker #5: I want to feel it should be taking costs out and not adding more costs in. How are you thinking about actually judging if you're getting a return on this investment and if you are actually driving productivity gains for the business?
Speaker #5: Because it's just not evident when we look at it through the P&L at the moment.
Speaker #2: Ben and Adam, I might start with that, and then I'll hand over to Chris and J.K. to talk specifically about the productivity benefits that they see in their businesses.
Speaker #2: But as you say, we did take a lot of costs out through the COVID period. A lot of that was what I'd call generic cost of operating and running the business.
Speaker #2: And we're continuing to do that. So if you look at a lot of our underlying cost metrics, in the second half, we saw quite a reduction in the growth rates now almost flat, I think, from memory in the second half versus the first.
Speaker #2: Even with the reduction that we saw in that top line. So I think we're actually seeing and bearing in mind there's a lot of inflationary pressures, particularly in technology, at the moment.
Speaker #2: So I think we're actually doing a pretty good job from managing those costs. What we are doing, though, is we are investing more and more now compared to pre-COVID.
Speaker #2: On specific areas such as technology, enhancing our customer experience, enhancing the consultant experience, etc. So there's a lot more that we're investing. So we're taking a lot of the benefits that we've taken out of the, if you like, historic cost base of the business.
Speaker #2: And we're now targeting that into specific investments, like the productive operations initiative that Chris was looking at, and like a lot of the digital initiatives and tech initiatives in leisure that we're focusing on as well.
Speaker #2: But Chris, did you want to talk from a productive ops perspective on the investment that we're making there and the returns that you're expecting?
Speaker #4: Sure. Yeah, we're certainly seeing productivity gains. And I think what we called out was typically we used to grow by adding travel consultants. We no longer need to do that.
Speaker #4: So travel consultant productivity is up over 30% in the last three years alone. And a lot of that is down to the fact we've automated our business.
Speaker #4: And what this means moving forward after productive operations is that we can add a lot more volume in moving forward without adding personnel costs.
Speaker #4: Obviously, we need to add some people in some cases, but as a standard, we're a much more productive business. That means we can pay our people better because there is inflationary pressures and there has been in recent years to retain talent.
Speaker #4: But we don't need to add anywhere near as many people as we scale up. So I think this is all about the last three years has all been about investing in future capability.
Speaker #4: And that's why we're now talking about investing more in growth. We are a more productive business. We need to add more volume in. And that's certainly how we view corporate.
Speaker #5: And Chris, didn't you say you're just adding a whole bunch more consultants into the business because the demand's strong? That was the point. I thought as you've done all this stuff around your online platforms, your agentic side, leisure, you've obviously got the agency model or the third-party model.
Speaker #5: I just thought you could scale much more quickly, but it sounds like you're having to put a whole bunch more costs in now because your TTV is getting better and all the wins.
Speaker #2: So I think you're cutting out there a bit, Ben, but I think it was around the you were referring to the productive ops costs that are coming in above the line, but they're not consultants.
Speaker #2: They're just what we're doing with those costs is we've got the people there that are really doing a lot of the development.
Speaker #4: They're mainly technology people. I really struggle to capture the question, Ben, because you broke up on our line. But the costs that are coming above the line are not traditional travel consultants at all.
Speaker #4: They're technology people. Most of our investments over the last three years has gone into tech, whether it's AI or automation of the business or new platforms.
Speaker #5: Okay, that's helpful. Thanks, guys. And then just around leisure, you've obviously had a really strong start to the year for leisure, which is great.
Speaker #5: Appreciate you've got that $60 million impact in Q4. You've guided to your corporate potentially being down drift FX driven for the first half. Do you think you can still grow your leisure in the first half, given the strong start you've had and the gains that you're getting through the business?
Speaker #2: Yeah, we're expecting some growth in the first half. This year, and so far, it started reasonably strong, Ben. So we'll see how it goes as we progress throughout the next few months.
Speaker #2: But unless there's any kind of major shocks coming our way, we don't expect to have any major impact to our business. Things are looking reasonably promising so far.
Speaker #5: Fantastic. Thanks, guys. Appreciate it.
Speaker #1: Your next question comes from Tim Plumb with UBS. Your line is open.
Speaker #5: Hi guys. My question is a bit of a follow-on from Ben's. In terms of the activity that you're saying to date in the leisure business, obviously, there's going to be people rebooking previous stuff.
Speaker #5: When you're break that out and you just look at the underlying new customer bookings, can you talk a little bit about what you're seeing there from a volume perspective, but then maybe also any changes in terms of consumer?
Speaker #5: Not so much going via Asia rather than via the Middle East because that's an obvious one, but in terms of end destinations.
Speaker #2: Yeah, hi Kim. Well, firstly, there was a shift in destinations first and foremost, and we've seen that a lot of customers have been traveling closer to home.
Speaker #2: And the other trend that we're seeing is that customers are more comfortable to book 12 to 18 months further out. And we've got a lot of packages that we sell in that space that are geared up and they perform really well in that space.
Speaker #2: What has been impacted is kind of that late last-minute booking where we see long calls to Europe and so on. That certainly has been disrupted.
Speaker #2: And we're also seeing a lot of premium customers return a lot faster and anytime there's a major event, that's typically the cycle where you start to see premium customers return first and then mass market follows thereafter.
Speaker #2: And so that's kind of some of the insights right now. But what we have seen on a year-on-year basis now, when we look at travel to places like the US and Europe, we're starting to see growth in that space pretty much from June through to July.
Speaker #2: But remember, it's often a lower base in the corresponding period because that was somewhat disrupted as we began the new financial year last year.
Speaker #5: Got it. Thanks, guys.
Speaker #1: Your next question comes from Sam Silk with Citi. Your line is open.
Speaker #5: Thank you. Morning all. Appreciate you taking the questions. JK, maybe just for you just want to pick up on some of your comments you've just made.
Speaker #5: There on you're expecting first half 2027 growth in leisure. Is that at the PBT line firstly? And then when I think about the 60 mil impact, could you perhaps pass that out?
Speaker #5: What was refund-related versus negative operating leverage or lost overrides? Just trying to get a feel of that impact. Thanks.
Speaker #2: Yeah. So we do expect both top line and bottom line growth in the first half this year. If things continue tracking with the momentum that we've started with, and then when we look at the Q4 impact, I called out that there were refunds to the tune of about $250 million related to air sales.
Speaker #2: We didn't detail the full amount of everything else that was impacted from crews and other product lines, but it was material. It's also important to note that in some of our markets, particularly like the UK, because of local regulations, we are required as the agent to repatriate a lot of customers when they are disrupted.
Speaker #2: So there's a material impact there as well that hit brands like Igloo, during the months of April. So in that quarter, effectively, all of those things consolidated, resulted in two of those months being unprofitable, which is highly unusual for us.
Speaker #2: And we really haven't had that since the pandemic. But that's kind of a broad overview of where it comes from, a combination of refunds, repatriation costs, and a variety of other things that hit us, including the type of travel that we sold was on lower margin products.
Speaker #5: Thank you. That's really helpful. And then maybe as we think about a more normal year, just thinking with that nine-month result and the extrapolated 200 million that you put out there, do you think that's on a reasonable assumption of what a normal year could look like?
Speaker #5: For leisure, thanks.
Speaker #2: Yeah, look, I definitely think that that's achievable. It's also important to note that we had some loyalty investment costs last year that were taken below the line.
Speaker #2: They'll be in our results this year. But that investment will start to pay off as we see returns from all the uplift KPIs that we expect to come through.
Speaker #2: And they will come down the line. But remember, there's been a lot of effort put into rebuilding and reinvesting in the leisure portfolio. So we see it as a business that's very capable of achieving the numbers that we've outlined.
Speaker #5: Thank you. Appreciate the color.
Speaker #1: Your next question comes from Mitch Sonigan with Macquarie. Your line is open.
Speaker #5: Yeah, good morning, guys. Thanks for taking my questions. Just a quick one on corporate. With productive ops and rollout of the AI platforms, is there any can you provide how much further upside do you think there is in productivity in terms of maybe the TTV over FTE recent 20% improvement?
Speaker #5: I guess following on from that, do you have a target for PBT margins of where corporate could get to in the coming years? Thank you.
Speaker #2: Yeah, as I said earlier, thanks for the question. I think that productivity transformation is structural. So we don't see that this is going to tail off.
Speaker #2: So there's two areas to this. One is the customer self-serving. And whether that's using AI to bring our technology more into our customers' technology themselves.
Speaker #2: So it's much easier for them to self-serve. That means they don't need to engage with our people unless our people are adding value. We see that to keep continuing.
Speaker #2: So almost every quarter, we're releasing enhancements. To that experience. We've got more customers using our own digital product now, and that really enables us to tailor that to help our productivity as well as improve their experience.
Speaker #2: And then with our operating systems, which is what a lot of productive operations is, we're seeing a lot more automation throughout our entire end-to-end business.
Speaker #2: So look, I think as we add volume, which obviously we are, because I said our winds were very strong towards the end of last year and the start of this year, we will expect to see more of that revenue converting into the bottom line, into profit.
Speaker #2: So as long as we keep growing the top line, our business is now set up. It is a transformed business. It is set up to better convert revenue to profit.
Speaker #5: Yeah, thank you. And maybe just a quick comment on the tender pipeline. You've obviously talked about the 1.6 billion one in FY26 with, I think, almost half of that in the fourth quarter.
Speaker #5: Curious to talk to how you're seeing that overall RFP pipeline. Are your win rates stable? And then just a quick follow-on with all the tech investment that you're making, is it actually getting easier for you to onboard large customers in FCM, or is the timing still pretty consistent?
Speaker #5: Thanks, guys.
Speaker #2: Yeah, it is. I'll stop the end of that question. It is getting it is getting easier for us to onboard. Because as we move to a single operating model, it's much faster for us to engage with customers, do the systems design, and really get them trading faster.
Speaker #2: So that is actually improving and has improved already. And we'll continue to improve. The RFP situation at the moment in most of our core markets is very active.
Speaker #2: Some markets are obviously stronger than others. But we probably, I think it's fair to say, haven't seen as many RFPs out. And our pipeline is strong for a number of years.
Speaker #2: So we're actually feeling very good about it right now. And I think we're going to have some pretty good wins over the next year.
Speaker #1: Your next question comes from Wei-Weng Chen with RBC Capital Markets. Your line is open.
Speaker #3: Hi, I got me. I guess there's been a bit of industry consolidation in the corporate space with Amex and CWT. Wondering whether there's any opportunities for you guys to scale in corporate through M&A too.
Speaker #3: Have you or are you considering buying CTM?
Speaker #2: No, is the short answer to that? Look, there is opportunities for M&A. The market is consolidating. And I think something I've said over the last couple of years, is that as we move to a single operating model, which we're well through and well along that path now, it's much easier for us to actually acquire businesses and integrate them much faster, and get much better economies of scale.
Speaker #2: So we are always looking and things come across our desk all the time. It's just got to make sense. And I think if we do acquire volume via TMCs, it will be in one of our core markets.
Speaker #2: So yeah, we're open to it. And I think it's all about the right acquisition at the right price. But we're in a much better position to acquire businesses now because of our single operating model.
Speaker #3: Oh, thanks. That's all from me.
Speaker #1: Your next question comes from Alex McLean with Evans & Partners. Your line is open.
Speaker #5: Morning, team. Two questions on the corporate business. Can you just confirm you expect the profit for that division to grow across the full year despite being down in the first half?
Speaker #2: Look, I think it's difficult to say at this stage. I think what we're saying what we're comfortable saying at this stage is that our profit result will be second half weighted.
Speaker #2: So we're expecting top line growth in the first throughout the whole year. But we think the second half is where we'll deliver profit growth.
Speaker #2: So at this stage, I think it's difficult to say exactly whether we will see profit growth for the full year. But we'll update you as the year progresses.
Speaker #5: Oh, I'm hoping you said it earlier on the call, but have you called out what is the productive ops number you're shifting from below the line to above the line in the corporate business just to give us a sense of what the delta is there?
Speaker #2: Yeah, it's around $12 million.
Speaker #5: Okay, thanks, Chris. And then just final one, still on the corporate business, just that top line, like constant currency through 5% this year, how should we be thinking about that over the next 12 months?
Speaker #5: Noting that you're calling out accelerated sort of onboarding in the second half, and yeah, I guess an increasingly favorable competitive dynamic over the next 12 months, particularly in the A and Z market.
Speaker #2: Yeah, sure. I mean, obviously with the A and Z market, FX makes no difference. And I think yeah, we still we're looking at good single digit top line growth going into next year throughout this year.
Speaker #2: And look, if we get good tailwinds in certain markets, I think we'll definitely the higher that single digit is, we'll depend on how quickly we can implement and onboard business.
Speaker #2: But we're feeling very good about growth. I think CT had a very strong year last year in constant currency. So it's really just getting FC.
Speaker #2: And that continues as we speak. It's really getting FCM to match that now. And as I said, we're in a very busy implementation period at the moment implementing the wins we've already got.
Speaker #2: So we're optimistic. How high that number will be, I think, again, we'll probably give you more color as the year progresses.
Speaker #5: Yeah, that's helpful. And then just one on leisure, maybe for JFA, you called out your at this point, you're expecting profit growth in the first half of that division.
Speaker #5: Do you think that business can grow profit at an underlying level excluding the equally benefit, or is that sort of a yeah, how should I think about that benefit?
Speaker #2: Yeah, igloo does contribute, but we also have expectations for other brands to also deliver as part of it's not just the igloo weighted. There will be other brands contributing.
Speaker #5: So underlying growth x igloo is the way to think about it.
Speaker #2: Yes.
Speaker #5: Okay, cool. That's helpful. Thanks, Steve.
Speaker #1: Your next question comes from James Lee, private investor. Your line is open.
Speaker #5: Hey, guys. Thanks for taking my question. Maybe just to follow up on the last question there, on the positive we've called out positive momentum in leisure.
Speaker #5: And referenced it to Q3, just clarity in Q3, we're talking about double digit growth. Is that what we're talking about, or back to positive?
Speaker #2: Are you referring to Q3 coming up in the year ahead, or last?
Speaker #5: Yeah, so in 26, we called.
Speaker #2: Yeah, that's right. So news at the last at the half year as well about we had an excellent January. We were trading up around 4% at one stage.
Speaker #2: So it was actually Q3 itself was a really good story for the leisure business. And the momentum was continuing, which gave us confidence for a solid Q4.
Speaker #2: And then the rest is history. So yeah, James, just to clarify, you obviously the Q3 was prolonged throughout the third quarter. We had good results, whereas July has been good, but it's really just one month.
Speaker #2: So I think JK's happy, but he's not patting himself on the back too much to share.
Speaker #5: Yeah. That's great. And maybe we've got a few moving parts in the HQ costs. Including net interest, and then we've called out cost controls, like how should we think about that directionally on a year-over-year basis?
Speaker #2: Yeah, so the HQ cost is you really need to break it down into really the four separate areas there. You've got costs themselves, which don't get that aren't distributed out.
Speaker #2: They were pretty flat year on year, which I think was a great outcome. And we expect that to continue. The cost control we've got in place there is going very well.
Speaker #2: So head office costs themselves should be relatively flat. Net interest expense, I think for the first couple of months, probably the first quarter, I'm still expecting that to be up a little bit year on year.
Speaker #2: Just because we started to see that ramp up as the year progressed in FY26. But as we get closer to the through this half, we should see that start to level out.
Speaker #2: So all in all, that net interest is probably going to be similar to this year, maybe a touch higher, but similar to this year.
Speaker #2: And TP Connect will be similar, if not a little bit less, of an investment in that segment in FY27. The operating businesses, though, if you look at the deck with the slide we've got in the deck, I think in FY25, they contributed nearly $10 million between them.
Speaker #2: And last year, it was a loss of a million dollars. It was about a 10 or 11 million dollars swing. $3 million of that is Petal Group, which obviously we divested during the year.
Speaker #2: But the rest of that $7 million was largely impacted in our touring businesses in particular, but also through Discover from the Middle East conflict.
Speaker #2: So we would expect those businesses to start trading up and all things being equal, particularly as we get to their stronger trading months towards the end of this financial year, we should be seeing them move back into positive territory.
Speaker #2: So all in all, for HQ, we'd expect to see an improvement on where we finished this year.
Speaker #5: Great. Thank you.
Speaker #1: Your next question comes from Belinda Moore of Morgan's. Your line is open.
Speaker #3: Thank you. Can I just check what are the loyalty costs we're expecting in the leisure result in 27? And can I just clarify, they're going to be purely in the leisure result?
Speaker #3: Also, the tax rate's been high for the last few years. Where are you seeing the underlying tax rate in 27, please? And score, I think you might have alluded to maybe some acquisitions.
Speaker #3: I mean, how are we thinking about this as the buyback? Is the buyback going to resume effectively tomorrow? Thanks, team.
Speaker #4: Belinda, yeah, in terms of M&A, and it has come up before, but we generally looking at specialist areas probably the I think generally in most of our major businesses, we can grow organically pretty well.
Speaker #4: But when we need specialist capability, for example, in the meetings and events in some of the countries of corporate, some of the specialist areas that you've seen in leisure.
Speaker #4: And we're certainly and Adam might say more on this, but in terms of the buybacks, we're certainly looking at what opportunities might be in the M&A.
Speaker #4: As well as the buybacks to make sure that we've our cash position is we've got it under control for the next couple of years.
Speaker #4: In terms of what we think will probably likely do in terms of the buybacks and the M&A. So generally, I think our guys in generally as an organization, we're pretty aware of what cash needs are going to be, particularly in those two areas.
Speaker #4: And did you want to talk about the tax issues?
Speaker #2: Yeah, yeah, yeah, I will. And Belinda, yes, we will be recommencing that buyback in the next couple of days. Now that we've released the results to market, as screw said, I think it's got a really good balance there at the moment between investment in M&A and having funds available for that versus the buyback.
Speaker #2: And also keeping one eye on our convertible notes as well. So I think we're doing the team's doing a great job managing through that at the moment.
Speaker #2: And we've got that in pretty good order. The effective tax rate, as you say, it's been reasonably high last year. FY25 was extraordinarily high, and that was deferred tax asset movements, which impacted that.
Speaker #2: Our tax rate for FY26 was about 30%. And underlying, I think it was about 33%. Our blended statutory rate from memory is about 29%.
Speaker #2: So all in all, I'd expect our effective rate over the next year or two will be still relatively high, somewhere around about that 29 or 30%.
Speaker #2: Jake, did you want to talk about loyalty?
Speaker #4: Yeah. Hi, Belinda. I just found the loyalty results we called out a number that went below the line of around 34 million. And if you look at the year ahead, we are projecting up to a maximum of half of that that will show up in the results.
Speaker #4: But that's a target rate in terms of what we obviously would like to see that come down a bit. But we also will expect to see some of the returns come through from that investment too.
Speaker #3: Thank you. Again, if you have a question, it is star one. Your next question is a follow-up from Sam So of City. Your line is open.
Speaker #5: Thanks, guys. Appreciate you taking the follow-up. I just had a quick question on leisure again. Short-haul travel net-net looks like it's going to be a mixed headwind with Bali and Japan, only accelerating.
Speaker #5: Gulf Carrier, capacity is still massively down year on year. And now you're taking loyalty costs above the line. I'm just trying to understand where that strength is coming from and where you expect the growth.
Speaker #5: Thanks.
Speaker #2: Yeah. So Sam, the portfolio is reasonably balanced. So if you look at a number of the brands and within the portfolio that we expect to grow, the Ignite business with My Holidays, My Cruise, My Touring, you might remember that we took out a charter of it's a Norwegian cruise line that's going to start sailing this September.
Speaker #2: We'll start to recognize some of the revenue of that coming through as well. So that's one part. Also, our luxury business is performing well.
Speaker #2: And that's out of the Northern Hemisphere as well. And so different segments being a more diversified portfolio means that the opportunity to grow is there.
Speaker #2: And what was the other part of the question?
Speaker #5: No, that's about it. Just trying to understand, I guess, the traditional part of your business. Still have headwinds, long-haul travel, etc. So just trying to understand what's driving that expected growth in first half 27.
Speaker #2: Yeah. Hey, Sam, it's Greg here. Just to talk on capacity. Yeah, that was obviously a pretty big impact in that last sort of quarter.
Speaker #2: The Middle East and the top three carriers were down 34% in capacity out of Australia. And 13% globally. What that actually meant was a lot of the carriers were looking at different source markets.
Speaker #2: So they were looking at point-of-sale out of the US and a few different things. But the encouraging thing now is that capacity is coming back.
Speaker #2: It's still slightly down on where it was pre the Middle East crisis, but the Middle East and carriers, those top three are expected towards the tail end of the first half to get back to 100% capacity as well.
Speaker #2: Their load factors are looking really strong at this point. And they're sort of maintaining sort of airfare pricing at the same time as well.
Speaker #2: So there's definitely a lot of capacity uplift in there as well from a capacity perspective.
Speaker #4: Yeah. I want to call out a Qatar Airways. That'll be a bigger carrier out of this part of the world in Australia. By Christmas time.
Speaker #2: Yeah. And we've transformed, Sam, the Qatar relationship as well. It was a combination of a lot of regional deals leading into this and now we're actually a true global partner of Qatar.
Speaker #2: We've stood by them, obviously, during the Middle East crisis as they sort of looked after us during the pandemic as well with uplifting customers to come back into certain source markets.
Speaker #2: So the relationship with Qatar and the other Middle Eastern guys are super strong.
Speaker #5: Thanks, guys. That's really good. Hey, and do you mind if I squeeze in a question on corporate? I think clearly airfares are going up with fuel.
Speaker #5: Etc. How are you thinking about the volumes, particularly towards the end of the year as budget starts to run out? Is there any kind of inherent assumption on volumes you're making or baking into this guide that you've given us?
Speaker #5: Thanks.
Speaker #4: Yeah. So we did a survey which we published recently, SCM did it on propensity to travel next year. And most customers are saying they are factoring in an increase in travel next year.
Speaker #4: Airfare prices, as you know, have been pretty high for the last few years. And actually, corporate travel has proved pretty resilient. So we're not too worried about that.
Speaker #4: The main growth we see really in both brands is just adding volume by winning new customers and getting them implemented. So I think we're there may be some customers who due to budget constraints at the end of the year do reduce travel.
Speaker #4: But on the other hand, others see growth. They normally we'd normally expect a net themselves out. So we're not too worried about that.
Speaker #5: Got it. Thanks, guys. Appreciate the opportunity.
Speaker #3: This concludes the question and answer session. I'll turn the call to Graham Turner for closing remarks.
Speaker #4: I think everyone for coming on and listening to us. Haydn can take the blame if you thought it was too long and uninteresting. He did a lot of the but we will be seeing some of you I know in the next couple of days.
Speaker #4: So thanks for coming on board. And Haydn, do you want to finish off?
Speaker #1: Just like to thank Chris for his kind words. Might not be seeing you guys much longer by the sound of things, but thanks, everyone.
