Citi sees profitability lagging for Australian travel firms

Web Travel

02/06/2022 23:49

** Brokerage Citi sees revenue activity for Australian
travel firms to lag and says post-pandemic environment does not
match that of FY19
    ** Citi expects slow Australian international volumes and
VFR travel to be key headwinds for online travel website Flight
Centre Travel Group  FLT.AX  
    ** Says physical and government-imposed limitations will
impact airline supply for FLT, implying elevated prices for
price elastic leisure customers looking to travel offshore
    ** Citi expects pricing power to be constrained domestically
for major carrier Qantas Airways  QAN.AX  despite rising fuel,
with relatively soft domestic passenger data and an element of
over servicing
    ** Expects B2C to lag for online travel agent Webjet
 WEB.AX  given slower Australian international and commission
impacts, but with EUR activity normalising, estimates inherent
business model will track closer to activity looking out to FY23
    ** Citi estimates a proforma revenue margin lag of ~210 bps
for travel management firm Corporate Travel Management  CTD.AX ,
impacted by slow outbound from international, elevated business
class tickets and revenue recognition policies
    ** Citi says overall travel activity for Australian firms is
at or near pre-pandemic levels but profitability appears to be
lagging; picks WEB as the preferred stock among the lot
    


 (Reporting by Riya Sharma in Bengaluru)
 ((Riya.Sharma@thomsonreuters.com;))