Flight Centre Travel Group Limited (FLT) Earnings Call Transcript & Summary

Okay. Thanks, everyone, for joining today. It's great to have Flight Centre on the agenda for our travel conference. This is Bryan Raymond. I'm the analyst at Citi in Sydney, covering Flight Centre. We've got both Skroo, Graham Turner; and Haydn Long from Flight Centre joining us. So yes, thanks so much for coming on today. Before we get into it, guys, I'd just like to flag, if you do have any questions, feel free to either raise your hand on Zoom. I think all of you are on mute at the moment, but we can get you off mute and you can ask your question directly -- or if you'll keep on throughout the 15 minutes or so we have today. And then, the other option is there's a -- you can on the participants, there's an option to send questions to me [ anonymously ]. So feel free to do that, and I can read those out anonymously, if you prefer that method. So again, thanks for joining.

Skroo, would love to get your thoughts on so how you're seeing recovery. Obviously, the timing of this is really interesting, with New Zealand travel bubble opening up and really interested on how you're seeing the recovery of the travel sector more broadly, before we get into anything specific.

Yes, Bryan. Thank you for that. look, it's fairly hard to predict, and I think we've heard a bit from Alan Joyce who's very wise. So I take a fair note to what he's thinking, too. My feeling is with the New Zealand bubble or Trans-Tasman opening, I think we'll see some further openings over the next couple of months. And certainly, just like the U.K. and the U.S. is going to open up some Trans-Atlantic as well probably in about -- we think, probably in early June, but around that. That's going to be a big one for travel, particularly corporate travel. And I think over the first quarter of next financial year, we'll gradually see more of these routes opening. Quarantine for vaccinated people being dropped or being able to home quarantine for perhaps 5 days, something like that, as long as you test negative. And gradually, things will ease up until probably December, January, where most people who want to be will be vaccinated. And then it's a matter of time before we get back to some level of normal volumes. So we're sort of loosely predicting, and we're not the only ones that -- leisure will be back to reasonably normal by about June 24. Corporate will be back to maybe 80%, 85% of pre-COVID levels by about the same time. But yes, it will be a bit up and down in the meantime. Just depends on what happens not only with vacations but with other variants that may come and disrupt things a bit. Generally, the vaccines look like they're doing a very good job so far. So yes, we're pretty lucky.

Absolutely. Perhaps maybe we can look at the New Zealand travel bubble is a bit of a case study as to how this may play out. I mean, how have you seen pent-up demand for that through your bookings? Are you seeing that really show that there's some real demand coming through the New Zealand leg, which -- and maybe if you could give us some insights into how meaningful that deal in Australia leg is [indiscernible].

It's an interesting question. Yes, there was a lot of pent-up demand, obviously, mainly from -- initially from VFR, people who are going to see their parents or their kids or that sort of thing. And that is mainly here, and there was certainly a lot of demand for that. And also for a certain amount of business travel because the people that hadn't been there -- or I mean, our guys went over on Monday to see our people there. I know with 99 Bikes, another example [ the EVP ] of our New Zealand operation hasn't been able to get there for -- basically for 9 months. So that's the sort of thing, early days of the business travelers who will go there. We haven't seen quite the same in terms of tourists at the moment, but that we're predicting as long as the borders look like they're going stay open for more -- for a month at a time rather than it maybe be closed at a day's notice, which doesn't look like it's going to happen, the tourism will start coming back. And obviously, you've got the ski season in New Zealand, and you've got winter in New Zealand as well. So there will be a lot of traffic the other way as well, I think. Once people feel reassured that the border is not going to suddenly shut, which generally, we believe the advisers to the New Zealand government are now telling them. We had a conversation with the Senior New Zealand executives a couple of days ago, and apparently, their advisers now have changed their views in New Zealand and basically saying -- advising them not to shut their borders down, unless they have a major -- a very major outbreak. So -- or unless Australia does. So we're pretty confident in that sort of now. And it's a very good starting bulk because it is international travel. It's -- New Zealand is not that important to Australia, but Australia is quite important to New Zealand travel as well. So that's quite a big thing for us in New Zealand as well.

Right. And for that upcoming ski season, in terms of outbound from Australia, have you seen much in the way of forward bookings at this stage? I know it's only just reopened, but is there much evidence that that's sort of coming through, forward looking?

The bookings are just starting to come, from what we've seen, but there certainly has been a lot of interest. And as I say, yes, a lot of inquiry, not a lot of bookings right now, but I think this will -- as soon as people see that we haven't had a case or 2 over there and the borders don't shut, you can get home again without quarantine and that -- once people see that, then the bookings will come. And if the inquiries are any indication, it will be quite strong. And I think the reverse is going to be quite important for us as well. The Kiwis getting over to Australia, particularly Queensland, for the New Zealand winter. So -- but I think that's just going to take a little bit more time before people have confidence there.

Bryan, we've also seen, as a general rule, people are booking closer to departure at the moment than they have historically. So I think they're also waiting to see whether they feel comfortable that they're going to be able to get to their destination. So when the border announcement came, the day after, we sold more tickets to New Zealand than we did in a month before that. So sales on that particular day exceeded March in total, and the volumes have stayed well and truly above where they were previously. But as Skroo said, as people get more confidence that the borders will stay open, that's when you'll really start to see a more sort of concerted uptick.

Absolutely. And in terms of other bubbles that are on the horizon that you think realistic for the next, say, 3 months or even 6 months that might come through with Australia, how are you seeing Singapore or Pacific Islands or any other areas?

Yes. It's quite a difficult question to answer. I think in New Zealand Trans-Tasman route will set the scene on this. Singapore, certainly, a likely one. And I think as we progress through what might be green corridors, in other words, corridors between countries with very little, if any, infection, and that could be some of the South Pacific Islands, certainly, New Zealand is looking at opening up to Rarotonga, I think. And then there'll be other islands like that. I know we've been talking about Fiji, but they're relatively -- for us, they're probably relatively unimportant, but obviously, they're very important to the tourist industries. And Singapore is going to be an important one because that will introduce the protocols. There's still some infections there. And it obviously is going to be -- it's probably going to be a hub. Some of the other Asian countries are getting more of a second or a third wave in some countries. So -- but it could be places like South Korea, Vietnam comes up. And of course, Japan, with the Olympics, is going to be quite an important testing case. As it goes on, obviously, we'll be going into more countries, probably more orange rather than green in terms of corridor. And that will be in probably a few months' time throughout the most time, and that's where we're hoping places like the U.K., where things seem to be pretty well under control, and the U.S. who are really starting to look like they're coming out of this rapidly, that we should be able to -- looks like we -- vaccinated people should be able to travel there within a few months without hotel quarantine coming back in. So it's going to be a gradual process over the next 3, 4 and maybe 5 months for some of those countries. Europe's -- some parts of Europe is still a little bit further away whereas I know, for example, Greece out of the U.K. is keen to take vaccinated people, and they'll probably be able to get back into the U.K. without quarantine. So it's going to be a mixed bag, and it's still -- yes, it's still a little bit hard to predict. Trans-Tasman, there was no reason for Trans-Tasman not to open up months ago, really, and we can see how long that took. So you just never know.

Israel, I think, Israel announced yesterday that they're taking people who are vaccinated from, I think, May -- end of May 21, something like that. And they're obviously pretty well advanced with their vaccination program, but there's other countries that are also pretty well advanced.

And I think the U.K. is still on schedule to open to international, allowing people to travel internationally for leisure from May 17, I think -- wasn't it? May 17? So things are coming along, but it's hard to predict exactly what will happen in the end yet.

Yes, absolutely. I think for your business as well, just maybe bringing it more to Flight Centre, specifically. I mean how do you think about resourcing up your sales teams ahead of this? Obviously, you've had a lot of people on JobKeeper that's now rolled off. Are you sort of bringing that back in, in anticipation of this volume? Or is that something you need to wait and see evidence that the sales is coming back before you start ramping up your cost base?

Yes, it's a bit of a combination of both. Obviously, in places like Canada, we still have their version of JobKeeper. Same with the U.K., it's staying on until the end of September. Whereas places like India and the States, they don't really have any help like that. So it's a bit of a mixed bag. As you know, we're in 23 countries with our equity businesses and it does vary quite a lot. France and Germany, basically, wages are heavily subsidized there. So our -- we're getting in those sort of countries, which are not necessarily a huge part of our business, but we're getting quite a bit of business, and our costs are still quite low. But in terms of places like Australia and the U.K., the States, where we -- for example, the States, we have been struggling to cope with the amount of leisure business we've been getting. So we're bringing back as many people as we can there. After the JobKeeper finished here, we stood up the people remaining or put people back on full-time because we know there's a lot of work to be done. The same in corporate, even though corporate is still mainly domestic and obviously some Trans-Tasman. Yes, it's a lot more manual now than it was before. Most of our business since before COVID was -- in the corporate field was basically self-booking or online booking. But now, a lot more of our bookings are done through a travel consultant just because of the protocols and people really traveling maybe for the first time for a year. They want to know that they're doing the right thing. They want to know what the conditions are, what the mask-wearing is on flights and that sort of thing. So it is quite mixed. But in terms of our people, we're confident we can cope in Australia, for example, with business for the next several months as it comes back. And it is coming back every month since February, it's been improving and reasonably substantially, too. So -- and we expect it to continue with that as countries come back online as people get more confident traveling domestically and Trans-Tasman for a start. So in 5 or 6 months' time, almost certainly, we will be reemploying people that probably we paid redundancy to. So that's -- yes, there's still a lot of people out there that we are keeping in contact with.

So I'm hearing in various industries that it's a pretty tight labor market at the moment. I'm not sure if that's changed post JobKeeper ending. But just in terms of the magnitude of staff that you probably need to rehire, do you see that as a bit of a risk that you can't hire quick enough if we do get some of these markets opening up pretty quickly?

Yes. I mean it is -- it will be a bit of a risk because I think it's happening in other industries. I know from our Spices hotels, it's quite -- particularly in more remote areas -- or country areas, it is getting quite hard to get the right people. I know with the pedal group, bikes, they've gone from 350 people, 400 people, to about 700 people, and they've employed a lot of Flight Centre people. But I think a lot of people in travel are going to be -- will want to get back into travel when they have the opportunity. So I think -- I know, for example, I was talking to one of our people who has just been brought back. And for the last 12 months, she's had a government job here at Queensland, working for the Queensland government. And I can't remember exactly what she was doing, but it sounded pretty boring. And she was just itching to get back in. And she had a skill set we really needed at this time in product, and there will be a lot of those people out there who want to use the skills they have built up over the years. So we're not -- it was interesting in the States with our Liberty brand there because the States never really shut down to the Caribbean and Mexico, which is obviously their holiday markets. And yes, that is coming back very strongly, and we have been struggling to get enough people onboard. We've actually been using even some of our corporate people to go back into leisure there, too. So it will be different in each country.

Absolutely. Yes. It'd be a good problem to have if you can't hire quick enough. That's what we've done through the last 18 months -- 12 months. So I'll just remind everyone, send me any questions on e-mail or stick up your hand on -- virtually on Zoom and we can come to you. I've just had one come through while we're talking, more around the corporate side. Talking about your comments around corporate getting back to the sort of 85%, is that something -- is that you referencing sort of market activity levels? And also, if you can talk about your own corporate business with account wins and so on, where you see corporate getting to over the next few years in terms of pre-COVID levels, and then maybe how you see the longer-term outlook for corporate.

Yes. Well, I think, yes, corporate, if you look at -- I think in -- I think Alan Joyce has said that in this quarter, he expects domestic travel to get back to about 80% of pre-COVID levels. Obviously, there's no international travel or virtually none, so -- and that's probably -- in TDV terms, that's probably about 40% of the Australian market. So we'll get 80% or 60% back fairly quickly, I think. And then certainly from our domestic corporate, it's starting to really pick up. And I will be surprised by the end of June that -- the domestic carriers weren't too far off what they would have been doing pre-COVID. That's sort of where it's looking as people just get used to traveling. And I know a lot of people on this call probably have started traveling and people have been starting to visit them. Corporate, generally, and I think everyone has been on Zooms, and I'm sure most people are sick of Zoom-ing, I certainly am, but it will replace some travel, certainly, for the next couple of years, while there's still a bit of uncertainty around. And as I said, we expect corporate to get back to 80%, 85% of the pre-COVID volumes probably by June 24, but that's really a guesstimate. We obviously can't know that, and we certainly would expect to pick up market share. So certainly, by 2024, we'd want to be back to 100% of pre-COVID levels ourselves. And the wins we've had in corporate, particularly in the U.K., France and the U.S. over the last 6 months look pretty good from that point of view for us because it's not a great environment. Particularly for the mid-tiered and smaller corporate agencies, they've had to really go into hibernation and their sales teams as well. But we haven't had to do that. So we have had some good wins. The other thing to bear in mind, too, is improving our productivity. We're putting a -- whilst we've had the opportunity during the so-called hibernation, both in leisure and corporate, we have been developing our leisure and corporate platforms, much more digitalized. And so we certainly expect to be more productive as we come out of this and be able to handle more business with the same number of people because we'll obviously have less people coming out of the pandemic.

Absolutely. I'll just pause there to see if anyone has any questions, place yourself off of mute or raise your hand, and I can do that for you.

I've got one, Bryan, if that's okay. It's Sam Seow here from Citi. Just interested in your comments around the manual process in corporate bookings. I imagine like the duty of care and the checks and balances are going to be higher. Could you give us an idea of how much the cost to serve is now in corporate versus, I guess, historic levels?

Sam, I can't actually give you any accurate cost. But I do know that we would traditionally, in the FCM brand anyway, have 70% to 80% of our bookings online self -- done by the travelers for their people. And that's well-known and obviously supported by our people, so it's not just pure online. They will have questions, but do a lot of the work themselves. It has come down to about 30-or-so percent, yes. So it does mean that people are looking. In other words, they're tending to talk to people first and then do the booking. Whereas, before, they tend to do the booking and then ask questions later. So it has been a bit of a change. I don't know the difference in costs. Obviously, it will be more time consuming, but we do have the people there, so it doesn't really increase our costs until we get to the stage, where -- that we have to bring on more people to do the same amount of work. But that's not the case at the moment. We've got enough people to handle the business in corporate and in leisure, for that matter. So we've still got quite a bit of capacity in Australia, and overseas, particularly in the corporate. The only place has been the States, where we've been really struggling with the amount of leisure inquiry.

Thanks for that. That's really good color.

Thanks for that, Sam.

I was hoping I could ask a question. You talk about how some of the smaller agencies may close down. Just wondering sort of what you see at the moment and then also what you're expecting going forward. And do you think -- would you acquire? Or is it just a matter of sort of businesses going out of -- no longer being able to run? If you could give me a bit of color, that'd be great.

Look, it's really hard to say at the moment because -- and if you just take Australia, for example, the government's given the travel and tourism industry about $250 million to help them through the next few months. So it will be keeping some small businesses alive, but it doesn't apply to the larger organizations in trouble. We didn't get anything out of it. But I think this will -- and we certainly don't want to see people going out of business. We're happy -- the business we've been winning is not because people have been going out of business. It's just because it's part of the sales cycle, and we've been very active in that. But my gut feeling is that in the next 3 to 6 months, you will see some consolidation, particularly the small and mid-tier travel intermediaries. It's -- and it depends a bit on how quickly the travel comes out. But if you follow more or less a timetable we talked about, I think the next 6 months is going to be a real struggle for some of the smaller players that rely a lot on international travel. But it's not something -- we definitely believe that the more people that survive as travel agents, probably the better for the industry in the long run, including us, rather than that just means we pick up more business. The -- if a lot of people don't survive, it's not good for the industry because when things come out of this, in say, 6 to 9 to 12 months' time, it will -- people will all struggle to get the sort of expertise they need generally in the marketplace, so -- but we will see that. As I say, probably 6 or 9 months, you'll see government -- all the government support are well finished by then, and you will see who the people are that can survive. And unfortunately, there will be a significant number that will struggle, I believe.

I just had another question come through on email I'll raise now around the balance sheet and your cash burn. You've talked about some of these. Sort of helpful. Is the volume coming back? Can you give us some color around how -- what that translates to from a cash burn perspective, how your balance sheet is positioned in terms of capacity, post-JobKeeper?

Yes. Look, I'm not sure what we've told the market, but generally, I think our cash burn is around that $30 million a month. We originally when pre-COVID, coded, I think our cash burn was $230 million a month on average, so we're still pretty happy where we are with that. And obviously, we've got a long runway. We have a lot of assets on that balance sheet, with the amount of revenue we've got coming in, which is improving every month, and certainly, from July last year, it's improved significantly most months. Obviously, we had a few hiccups in December when borders shut and that sort of thing and when second waves came into Europe and in the U.K. But generally, we expect that revenue to keep coming back month-on-month. And the revenue, I don't think we have an -- we can say what the revenue is. But yes, the revenue is becoming a significant part of our overall cost base now month-on-month. But we still got a reasonable deficit month-on-month, which we -- I think we've generally said, depending a lot on what happens in these timetables we've been talking about with travel and domestic borders staying open, Trans-Tasman staying open, for example, Trans-Atlantic opening up, we should -- leisure will be the big one because it's obviously a significant part of our business, and it's also a more expensive part of our business. But between leisure and corporate, we would expect to -- revenue to equal our costs, probably coming up towards the end of this calendar year, so -- yes, but it's very hard to predict exactly.

Absolutely. Just a follow-up from me on that question that came through is, you obviously processed a lot of refunds through COVID, but how many -- what percentage of what you were doing before was deferred, i.e., people that -- some of this volume that we're talking about over the next 6 to 12 months might be people that have already paid and just got sitting there as a credit versus those you refunded and it will be incremental revenue coming through?

Yes. It's a good question. Generally, the way it works, I think we've refunded about $1.3 billion, $1.4 billion in Australia. It's probably nearly double that globally, well, probably around the $2 billion globally. I think -- yes, bear in mind, about 23 countries, there are -- all -- it's about 7 that do most of our leisure business. But all of them have corporate business, so -- and corporate, the refund wasn't a big issue. But what was the question?

About refunds, some of it's being used now. Some people will take advantage of it to holiday domestically. Some people will use the Trans-Tasman. And if one will come out in one go, you'll see people who maybe are sitting on a credit to go to Europe might wait for the summer, whether that's this summer coming up or whether it's the following summer. So you will see that sort of washing through over -- I think it will take a fair while for it all to come through. There are still some outstanding refunds. Thai Airways went into administration, just at the start of coronavirus and haven't processed very many refunds at all yet, so there will still be some coming through. They're pretty good at allowing people to travel if they want to keep it in credit, but if you want that -- the actual money back, it's been a bit tougher. But yes, there will be a little bit of that, Bryan, but some -- it's working its way to now.

Yes. Bear in mind that a lot of these credits sit with the operators and the airlines rather than with us. We certainly have -- we are holding some customer funds, but that really has been stable for the last few months. And that's because there's money coming in, particularly in leisure as well as people spend -- if you looked at the Trans-Tasman, quite a bit of the Trans-Tasman business was using various credits from the airlines, in particular, as well as frequent flyer because, obviously, people have been accumulating that over the last 12 months as well. So -- and particularly a lot of the small tour operators and cruise lines are holding quite a bit of that -- those credits. If people -- if our customer, for example, wants refunds, we request that from the operator and the cruise line, the airline, the tour operator. And that's why it has taken some time to get people because, obviously, some of the players are slower than others getting it back to us, so -- but it would appear generally most of the refunds that people want have been satisfied now. And as always, the small players, we don't have failures in the small players at holding a lot of credit that cause a bit of a run on it. I think everything will be pretty -- has pretty much stabilized now.

Yes, yes. That's great. And another question has come through just around consumer behavior and some of the package deals that obviously a pretty good margin for you guys typically, I'd assume, where there's common flights and so on. How are you seeing those get pitched at the moment to yourselves and across the market in terms of pricing? Are you seeing more value offers playing out, more domestically -- more domestic-centric? Do you think that some people -- is there much premiumization coming through? Can you just maybe give us some color around what people are latching on to at the moment in terms of offers?

It varies quite a lot depending on what part of the industry we're talking about. In our MyHolidays business, for example, we're seeing a lot of cruise, '22 and '23, particularly overseas, whereas the domestic holiday market tends to be packages -- domestic packages. And we will see a lot of New Zealand coming up and then places like Fiji and that sort of thing with the packages as things open up. It's pretty hard. Cruising is very popular, but people do tend to book that reasonably way ahead. Whereas if you're going on a holiday to the Gold Coast or Cannes from down South, you might book a few months ahead at the most. So the domestic tends to be late booking with these packages. The pricing generally has been reasonably normal. And if you looked at the prices on the Trans-Tasman, it's -- the return was around $400, $500, which is pretty normal in economy, I think. So they're not dirt-cheap, and they're certainly not expensive at this stage. And as the capacity comes back, I think there will be more specials come on the market, but we've got -- as I said, we've got 6 or 9 months where it's going to be -- there's not going to be a lot of routes open. So -- and for example -- the capacity, for example, to Europe and to the States and -- with this hotel quarantine, I think they're only able to bring about 100 people in each flight. The fare -- those fares are expensive. And until they can carry a full load of 300 people, there's not going to be specials on those sort of flights. Obviously, it's quite difficult to get -- it's quite easy to get out of Australia, if you can get permission in terms of flights, but it's quite difficult to get back in, and it's quite expensive. So -- but that's not -- it's not market prices. Once market prices start coming back in, I think you'll see some very good stimulus as these routes open.

I think sort of part of it, too, is about whether the international traveler has spent holiday at home and getting some bigger-ticket items, and yes, there's definitely been. We're going back a few months now, when the Queensland Premier decided to open the borders to people from New South Wales and Victoria, our domestic sales were -- within 2 days, were higher than they were last year. So there's certainly some pent-up demand from people doing premium sort of holidays. And I think with travel associated to our luxury travel brand -- retail travel brand here, the average file size is higher for domestic holiday now than what it was pre-COVID. And so people are doing the big-ticket items. But there's also a mix. You've got your people going for the 3 Star Gulf Coast holiday as well, as I will probably have to do.

Just another question from the e-mail is around the margin outlook, like revenue margin. Their asking around sort of overrides. I'd add in there online and the mix of business that you're going to get over the next little while, while it is more short-haul, less complex flight. Like, how should the market, in general terms, be thinking about your revenue margins over the next few years?

Yes. Look, we're pretty confident when international opens up that the margins will be -- the mix of margin will be pretty much at least as good as pre-COVID. There will be some exceptions. And obviously, at the moment, with a fair bit of the domestic business, both here and in the States, the margins are not as high as when you have international travel, but we're certainly -- from the negotiations we've had with both air product and land product, we expect our margins generally to be just as good as pre-COVID. Overrides, obviously, don't really make any sense at the moment, so we're negotiating overrides into our overall margin. There's obviously some players like home carriers like Qantas that are a bit harder to play with, but we've been -- that's been the case for -- I was saying to Haydn other day, I think I can remember having arguments about overrides with Qantas and them wanting to save money 25, 30 years ago. So that's not new, particularly when you're a domestic player with a significant market share as Qantas is now. And I don't necessarily -- I don't particularly like it, but I don't necessarily blame them because they can do that. But certainly, from our point of view on all the airlines we've spoken to, and most of them, of course, are international, we will have no trouble maintaining our margins there. And it's the same with tour operators and hotels in that we're quite confident our overall table margins will be at least as good as pre-COVID once international opens up. When domestic is dominating, obviously, our margins will be -- our gross margins will be lower.

So we had Virgin speaking in this conference earlier this week, and their comments were about overrides. We need to keep some prices relatively low across the industry in order to encourage that demand back. And sort of the more that overrides that are in the system and the more profit -- the bigger the profit for the higher-ticket prices and, therefore, the lower the volume. I thought that's an interesting -- maybe it was self-serving, but it's an interesting perspective on things. I'd be interested in your take on sort of the way forward for the industry in terms of that volume and volume coverage versus profit recovery and what should come first and how you think the industry will manage it.

Yes. Absolutely glad that I'm not an airline because that's a sort of decision they have to make. But if you take -- whether it's international and the Middle East and Asian or American carriers, particularly from our point of view, I mean, as these routes open up, they really will want the volume. And they -- I'm confident -- that's why I'm confident our margin will return to pre-COVID pretty quickly. If you look at the domestic market here, and you've seen Rex and Virgin, probably not in -- well, they're finding it difficult now, but I think they will. Qantas is in a somewhat dominating aspect, and they will set the pricing through themselves and through JetStar. So it will largely depend on how much business Qantas is prepared to give away through price by not being that cheap. And I think JetStar will -- that's why JetStar is there basically. Qantas will probably try to improve their yield, but they'll have JetStar defending it against Virgin and Rex. So I think volume in domestically will be the secondary thing. Yield will be important, particularly for Qantas. But for Rex and Virgin, they really need -- they will need the volume. There's no doubt, both with the SME business and in the leisure market. So I'm not sure what Jayne said, but what was -- I didn't quite get that.

No, no. I think you're right. I mean, she was highlighting the need for volume to return in order for the industry to get back to a sustainable base and then profit will follow. Perhaps that's a luxury of being in private equity hands as well. You do have a longer view in some cases in the next 6 months or 12 months, which those that are listed often need to have. But yes, I mean, there was plenty of interesting insights more, obviously, in the airlines' perspective. But yes, while we're talking margins, the profitability sort of question that's come through around -- and it's sort of related to some -- what you're talking earlier about. I think the Sam Seow asked the question that -- around the higher complexity around corporate and more labor being required and so on. How are you pricing for this in terms of booking fees? Are you able to pass that back on to your corporate clients, higher per-trip booking fee? Or is that something you're absorbing? Like, how are you thinking about profit generation there?

Look, generally -- I'm not an expert in corporate contracts, but generally, there will be a difference in pricing regime for online bookings versus people who book through a person. So we do have -- we will have that covered in a reasonable number of our contracts. But we would prefer generally, as a business and profitability, to do more online backed up by a person. That's just -- that's the way corporate works very efficiently. It's good for the customer, and it's good for us. So -- but we will get compensation for the more manual areas of corporate as well in most contracts. So yes. But obviously, as business comes back. And generally, obviously, international corporate, which I think was about -- is about 40% of our TDV in Australia, it is obviously a much higher margin, but it's also much more manual as well, whereas domestic's generally pretty fairly -- a lot of online bookings there.

Okay. Just going to throw it out there for any other questions on the lines. I think I've exhausted the most of them, on e-mail. So happy for anyone else to come in.

Yes. I've got one, Bryan. Skroo, it's Sam Seow again from Citi. I guess, just in leisure, I guess, traditionally, I guess, your sweet spots being more complex travel. And when we think about what's coming back, domestic, kind of single origin or single destination holidays, I guess, single country bubbles. Does this like kind of reduce complexity in travel have any implications for you guys? And then will there be a lag, I guess, in the recovery?

Look, Sam, it's going to -- we're in no illusion that this is a reasonably long run for us in leisure and in corporate, but particularly in leisure. Because before the earliest probably that there's going to be a reasonably high level of normality in the next European -- Northern Hemisphere summer, I suspect, about a year's time, and -- but we'll be building up to that. And as you say, a lot of it will be point to point. I still -- but people will still want to use a travel agent for anything with any doubts about it. There are so many -- I know myself just traveling to -- like we're going to New Zealand in a couple of weeks and we're in -- I went to London in December, you just wouldn't book things like that yourself, even the point-to-point stuff. I'm sure some people will. But I'm pretty confident that as things come back to the more complex that we'll get plenty of business with a reasonable margin. In the meantime, it is about -- the main thing we want to get back is more volume and hopefully have -- get market share because of the way our -- the way we've kept our assets in play during this and kept our best assets and -- not only in Australia but pretty much everywhere in the world, both in leisure and corporate. So that's our main thing is pick up volume as it comes back. We've got plenty of different models and enough brands, and we're in enough places to be pretty confident we can do that. And I'm not -- we're not really too concerned about -- there's no doubt, for example, domestically, we will get more online play. Our online now in Australia is up to -- it's 25%. Whereas, I think, pre-COVID, it was about 10%. So yes, that certainly will help us. And as -- we will be trying to make sure really simple stuff does come back online, if that's the way people want to do it because, obviously, we'll have less staff, and we want to make sure those staff are focused on the more complex travel arrangements as much as possible. But it is up to the customer in the end.

Just to follow up on that. The online side is typically being pretty low attachment rate for higher-margin services. How -- is there -- do you think there's a way you can address that? Or is that just a structural issue with online that will always be a bit of a headwind on profitability?

Look, we're putting a lot of work, Bryan, into our online capability, not just in terms of the way you book flights but the way you attach other business. So I think you will see us coming back with more and more capability in to book more packages, more add-ons and that sort of thing. So we've been putting a lot of work into that during this hibernation period, not just in Australia. It's pretty much a global leisure product as well -- project. So that -- don't get me wrong. Online is not going to be our main method of distribution for some -- forever, as far as we're concerned. It's for people who want to book some of the simple stuff online. And the more complex travel with a person, we want to make that as easy as possible. And if it's a few nights at a hotel or a small package or whatever, the capability will be there to do that. But we don't expect the online to be an enormous part of our profit, but it will be a significant part of our TDV as things come back.

Absolutely. We've got time for one final question, if anyone would like to jump in before we wrap up. Okay. If not, I'll just sneak in one final one, if we can. Just on industry consolidation. We sort of touched on it before, but there hasn't been much yet. We've seen JobKeeper finished. Do you think there's much opportunity for you guys, either to acquire or see a lot of those businesses? And is it more on the leisure side than the corporate side? That would be my question.

Yes. Generally, we're not too concerned about acquiring corporate business, except maybe in a geography that we want to be in a reasonably significant way. And there are some countries that we're -- we would like to have a greater presence in and an equity presence in corporate. But yes, in leisure, it's a bit the same. It will be doubtful if there's a major leisure player that we'll want to acquire that I can see in any of our geographies at the moment. But for example, in the B2B independent contractor model, which there's a lot buyers there, and we're certainly encouraging people to join our model in the B2B area. That's the business to business, where they basically work their own business, either as individuals or as a part of a small team or a small travel agency so that we get -- they get the buying benefits and the other benefits of being part of our group, and -- but they still have their independence. And so I think there'll be some activity there, and we're pretty confident we'll pick up some -- quite a few business, not just in Australia in that, but in places line New Zealand and the U.S. as well in Canada, and as well as South Africa. But yes, to answer -- the overall question is we can't see acquisitions being a major part of our strategy coming out of this at the moment. But it's the sort of thing you never say never because you just don't know what opportunities are going to be there.

Of course. Excellent. On that note, I think we're out of time. So really appreciate you guys coming on today. Thank you very much for joining us, everybody as well. It's been a really informative 45 minutes or so discussion. So thanks, Skroo. Thanks, Haydn.

Thanks, Bryan. Thank you.

Thanks, Bryan. Thanks, Skroo.

Thanks, guys.