Flight Centre expands India operations, buys Travel Tours Group

Acquisition carried out by Flight Centre's Indian subsidiary FCM Travel Solutions in a cash and stock deal; combined entity will have a gross revenue of Rs 3,000 cr

Australian firm Flight Centre Travel Group has acquired the operations of Bengaluru-based Travel Tours Group to expand its footprint in South India and grow its leisure travel business.

The acquisition has been carried out by Flight Centre's Indian subsidiary FCM Travel Solutions (FCM) in a cash and stock deal. The combined entity will have a gross revenue of about Rs 3,000 crore. Gross revenue refers to the transaction value of the business carried out by the firm. The deal size was not disclosed.

The deal will allow the Australian firm to capitalise on the growing outbound and inbound travel segments in India.

Flight Centre entered India in 2005 acquiring New Delhi-based travel firm Friends Globe and earns about 70 per cent revenue from corporate travel business in India. Its Indian business is run under FCM Travel Solutions Brand. In 2014 the company made a foray in leisure travel segment and it has set up its outlets in eight cities.

With the acquisition, FCM can tap into B2B and free independent traveller segments in South India. The group will have outlets in 13 cities including Chennai, Goa and Vizag, where it had no presence.

Travel Tours Group had a gross revenue of Rs 750 crore in FY 2016. Following the deal FCM will become one of the largest companies in corporate travel, meeting-incentive tours and free independent traveller (FIT) segments. Shravan Gupta, managing director of Travel Tours Group will also join the board of FCM.

" Overall the business is showing double digit growth. For us leisure travel and meeting incentive tours are seeing a growth but corporate travel is showing a decline because of low fares. We have a B2B business globally and the acquisition gives us the platform to launch it in India," said Rakshit Desai, managing director of FCM Travel Solutions. Desai said the the group till now had presence only in Bengaluru and Kochi in South India and this acquisition will grow footprint.

Earlier this month, Flight Centre also launched an inbound travel division to capitalise on growth in foreign tourist arrivals and hired Prashant Narayan, a former Thomas Cook executive to head the business. The company will focus on in bound travel business in India, Sri Lanka, Bhutan and Nepal.