The Flight Centre Travel Group Ltd (ASX: FLT) share price is under the spotlight after downgrading its profit guidance for FY26.
Flight Centre is one of the largest ASX travel shares, with both a consumer-facing travel agency business across multiple countries, as well as corporate travel.
FY26 profit expectations downgrade
Flight Centre announced its guidance for underlying profit before tax (PBT) has been revised to between $275 million to $295 million.
The mid-point of that guidance is in line with FY25’s $286 million underlying PBT, which is materially below the previous guidance of between $310 million to $345 million.
Flight Centre noted that this decline reflects “temporary, conflict-driven headwinds, not deterioration in the underlying business”. UPBT grew by 10% over the first three quarters, with growth of around 20% in the third quarter of FY26.
What are the impacts?
The ASX travel share noted that the fourth quarter disruption is expected to reduce leisure earnings by around $50 million compared to previous expectations, with a further $5 million impact in its touring businesses and a foreign exchange impact of between $5 million to $10 million.
The company said that the leisure shortfall includes travellers with forward bookings to the UK and Europe typically amended or cancelled plans. Customers who re-routed through Asia or the Americas to bypass the Middle East typically switched to lower margin carriers. There has also been a slowdown in longer-haul bookings.
Flight Centre also said the global corporate business is less affected and is on track to deliver “strong FY26 profit growth”.
The business said the Middle East peace agreement reached this week provides a “clearer runway” into FY27 and a significant earnings tailwind but unlikely to meaningfully improve how FY26 turns out because it has come right at the end of the financial year.
The company noted that it’s implementing AI throughout its business and also trying to implement savings.
Flight Centre share buyback
The ASX travel share announced it plans to buy back up to $200 million.
Flight Centre said this is an opportunistic deployment of cash holdings, reflecting a “strong belief” in Flight Centre’s recovery and outlook.
Final thoughts on the Flight Centre share price
If the peace deal does lead to a return of energy flows from the Middle East and normal flight patterns, that would be good news for Flight Centre demand.
For the medium-term, this could be a good time to consider the Flight Centre share price, because there won’t always be the Middle East impacts going on.
However, there are other ASX growth shares I’d rather buy today where the growth outlook is clearer.
