first half to be modestly down

Sydney - Monday - November 3: (RWE Australian Business News) -
Flight Centre Ltd (ASX:FLT) chief executive Mr Shannon O'Brien told the
annual meeting in Brisbane this morning that while it was difficult to
predict results in the current climate, the company believed the first
half would be "modestly down" on the $92.9m result achieved during the
first half of 2007/08.
"This means it will be difficult to achieve the level of pretax
profit growth we initially targeted for the full year," he said.
So far this year, the company had seen:
* sales growth in the order of 5pc during the first quarter,
followed by a slowdown in October;
* credible profit results from its established businesses; and
* ongoing business investment and improvement.
"To provide you with a clearer picture of our overall position,
I will discuss our organic business and our US retail business
separately. Liberty was, of course, not part of Flight Centre Ltd during
the previous corresponding period and has therefore created a distortion
this year," Mr O'Brien said.
Based on current conditions, at the half-year it expected:
* its organic businesses would be modestly up on last year,
"which was an exceptionally strong period"; and
* losses from Liberty in line with those recorded during the
second half of 2007/08 while further restructuring and integration was
underway.
"The inclusion of up to $15m in Liberty losses during the first
half means we are likely to achieve a reduced profit result in
comparison to the previous corresponding period," the CEO said.

*****

Mr O'Brien said, "Recently, we have experienced significant
volatility in world financial markets and other macroeconomic shifts
that have eroded consumer confidence globally.
"While passenger growth has slowed gradually over several
months, the effects have been particularly evident during the past 30
days, as travellers digest the current bad news in the United States and
elsewhere.
"Weakness in the Australian dollar has also been in the
spotlight, although we believe its impact on consumer behaviour in the
travel sector is sometimes misunderstood.
"Our experience has shown that currency fluctuations typically
lead to a shift in holiday spending habits - class of travel, style of
accommodation etc - rather than an ongoing shift away from unique
destinations like the United States or Europe.
"From an outbound tourism perspective, it is also relevant to
note that the Australian dollar still has considerable buying power in a
number of key international markets including Thailand, Fiji, Bali and
New Zealand.
"Also, a decrease in the Australian dollar's value will have a
positive impact on inbound tourism numbers. Just how significant this
impact will be is yet to be seen.
"With company-owned operations in 10 countries, Flight Centre
has an opportunity to benefit from any increased interest in Australian
holidays."