There is a lot of speculation that Flight Centre Travel Group Ltd (ASX: FLT) and Corporate Travel Management Ltd (ASX: CTD) could merge.
Flight Centre is one of the world’s largest travel agent businesses, it has a substantial network of operations in other countries as well.
Corporate Travel Management is a provider of travel management solutions to the corporate market. They pride themselves on personalised service excellence and client-facing technology solutions, and these traits have helped them to win AFTA’s award for Australia’s Best Corporate Travel Management Company twelve times. They are currently operating throughout Australia, New Zealand, North America, Europe and Asia.
Are They Going To Merge?
It would certainly make sense for them to merge. The two are large players in their field and a combined entity could create much stronger economies of scale and cut out a number of costs.
Despite media, such as the Australian Financial Review, asking the question about whether a merger is on the cards, Flight Centre apparently couldn’t deny that it had been approached by Corporate Travel Management.
However, Flight Centre did disclose that there are no talks currently going on with Corporate Travel. Flight Centre CEO Graham Turner said to the AFR: “there are no ideas of us working together in any way at any time now or in the future”.
Corporate Travel gave a similar response, that there are no “current” discussions going on between the two travel companies.
Are Either Of Them A Buy?
At the moment Flight Centre doesn’t seem like a great bet, it recently downgraded its profit expectations for FY19 which could mean FY20 is slower as well.
Corporate Travel continues to generate impressive results and would be my preferred pick of the two. However, I would much rather buy shares of the exciting growth shares in the free report for my portfolio.
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