After pandemics and global crises, Flight Centre faces its next big test — artificial intelligenceTom RichardsonThe NightlyWed, 12 November 2025 1:10PMCommentsCommentsEmail Tom Richardson
Flight Centre has survived the 9/11 terror attacks, rise of the internet, global financial crisis, and coronavirus pandemic, but analysts and management see artificial intelligence as the biggest structural shift for the travel business yet.
At its annual general meeting in Brisbane on Wednesday, Flight Centre’s management warned AI will transform the travel industry for holidaymakers and corporate workers, with significant consequences for investors.
Uncertainty over whether the Australian travel icon will be a winner or loser from new services linked to AI has sent shares 26 per cent lower over the past year, although chief executive Graham Turner emphasised the benefits of the technology on Wednesday.
“AI has the potential to transform our industry and we are embracing it,” he told the AGM. “We’re embedding AI into customer service and operations, delivering measurable benefits for our customers and success teams.”
Flight Centre said it has saved 64,000 hours in employee time by using AI to intelligently route customers’ inbound travel queries at the same time as improving the booking experience. Virtual travel assistants powered by AI also now interact with its business travel customers as a travel companion. to answer questions and complete tasks autonomously.
“They’ve been talking up the whole AI thing for at least a year,” said Richard Hemming, the founder of the Under the Radar Report. “And I actually think they will benefit more from it, than what they may lose. The major disruption to travel with the internet has already occurred, and people still see value in human travel agents otherwise they’d only use the internet now.”
Future of travel
Eventually, AI assistants could act as digital tour guides for high-spending business or leisure travellers, throughout a trip to offer additional services such as taxi, restaurant, or sightseeing bookings to cross-sell or up-sell services for travel operators like Flight Centre.
“The bigger impact (than AI) to Flight Centre’s business is the overall macro and economic conditions,” Mr Fleming said. “In US corporate travel they’ve gained market share and they want to push into corporate (travel) more. So, I struggle to believe tech is going to kill this business, as it hasn’t killed it before.”
However, hedge funds and professional investors are betting that Flight Centre shares will extend 2025’s horror run. As at November 5 it was among the most shorted stocks on the S&P/ASX 200 Index, with nearly 11 per cent of its shares on issue held by traders who think the stock will fall further.
“While AI presents us with opportunity, it does, of course, also represent a threat as competitive customers offerings emerge,” said the group’s chairman, Gary Smith. “We’re very cognisant of this and are working diligently to combat these competitive threats and offerings globally as they arise.”
Reasonably optimistic
At its AGM, the travel group guided for underlying profit to climb to between $305 million and $340 million over the 12 months to June 30, 2026, which would represent growth of up to 17.6 per cent.
This follows a soft year for travel over the 12 months to June 30, 2025 as holidaymakers worried over political change in the US and escalating tensions in the Middle East.
Mr Turner told the AGM he’s “reasonably optimistic about the chapters ahead” just as he was 30 years ago, when he founded the iconic group after backpacking around the world with his mate and business partner Geoff Lomas.
On Wednesday afternoon, Flight Centre shares were 1.4 per cent higher to $12.36, as its updated profit guidance largely met the market’s expectations on strong results for its corporate sector and signs of improvement in holiday travel bookings.
Broker RBC Capital Markets kept a buy rating on shares and $16 price target. Management also used the AGM to flag that they’re prepared to consider extending its strategy of growing via the bolt-on acquisitions of smaller travel businesses.
Mr Fleming attributed the negativity around the stock to ongoing worries that the business model of bricks-and-mortar stores will be flattened by online competition. “Short interest has always been high in Flight Centre,” he said. “But Mr Turner is a good operator with levers to pull. And the more people pay in travel the more reassurance they want (from a human rather than machine) in travel, which can cost a lot.”
Others like Morgan Stanley’s high-profile US internet analyst Brian Nowak have regularly suggested the online travel sector will be revolutionised as personal AI assistants suggest and book tailored holidays at the best prices. This will save travellers time in avoiding scrolling through websites for the best flight prices for example, according to Mr Nowak.
“Over time, AI will help devise pre-packaged itineraries, and recommend specific flights, accommodations and experiences that best match consumers’ needs. As a result, travel companies will benefit from higher customer conversion and repeat use,” he said.
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