Flight Centre (ASX: FLT) has today announced plans to launch its FCM travel management business in Japan, the world’s fourth-largest corporate travel market, via a joint venture (JV) with Tokyo-based NSF Engagement Corporation.
Managing director Graham Turner said Japan was a significant addition to Flight Centre’s global corporate travel network, which now extends to 97 countries through company-owned businesses and licensing agreements with independent local operators.
“Japan is a key corporate market because of its size and importance within the global economy as a business hub for multi-national companies,” he said.
“By securing an equity position in this crucial market, we will enhance our ability to win new local, regional and multi-national accounts, while also gaining greater control over and enhancing the service we provide to our existing customers with operations in Japan.
“We believe this will become a very significant business and a valuable addition to our Asian network, which also includes businesses in China including SAR Hong Kong, India Singapore and Malaysia.”
Prior to the pandemic, Flight Centre says FCM was one of the world’s fastest-growing travel management companies.
Since COVID-19 hit, significant investment has taken place to fast-track recovery and drive future growth, resulting in the corporate travel business securing accounts with pre-COVID annual spends exceeding US$1.4 billion (AUD$1.9 billion).
FCM Asia managing director Bertrand Saillet said Flight Centre’s investment in Japan at the beginning of the post-COVID recovery phase underlined the business’ future importance to the company.
“Choosing to expand FCM’s network in Asia at this critical time speaks volumes of the tremendous potential Japan has and the role the country will play in our global corporate strategy in the future,” Saillet said.
“As the world’s fourth largest business travel market, Japan will undoubtedly provide exciting growth opportunities for FCM both in terms of enhancing our offering to existing FCM customers throughout the world and attracting new customers in Japan.”
NSF CEO and president Shigeru Hiromatsu said there was considerable synergy between the two JV partners.
“The Japanese business travel market offers vast opportunities to grow the customer base and expand with the right products and services,” Hiromatsu said.
“FCM’s unconventional, innovative and flexible DNA resonates deeply with NSF Engagement Corporation’s belief that it is possible to use New Standards for Engagement to break through conventional concepts through technological capabilities while building a strong business with sustainable growth.
“We are excited to partner with FCM to leverage the business’s technology and global expertise to facilitate expansion and penetrate the high potential Japanese business travel sector.”
FCM Japan will operate from January 2022 and will be headed by general manager Kenichi Shiraishi, currently the leader of NSF’s corporate travel business.
The announcement comes just a week after Flight Centre posted a $601.7 million group loss for FY21.
TTV in FY21 was 74.2 per cent lower than a year earlier at $3.94 billion, while group revenue fell 79.1 per cent to $395.9 million.
The phasing out of the JobKeeper subsidy provided a $41 million hit to the company’s bottom line, along with a $42 million increase in underlying costs.
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