Profits at Flight Centre, Australia’s largest travel agency, have doubled following a surge in demand from customers in its core domestic business.

In a statement to markets the agency confirmed first-half profits increased to $51.13 million (£30 million) for the six months to the end of December. This is up from $26.1 million (£15 million) for the same period in 2008.

Flight Centre revealed cheap airfares are driving up demand, with the organisation seeing positive sales volumes in most markets. The Brisbane-based company has operations in the United States, United Kingdom, China, Canada, India and Hong Kong.

“Certainly consumer confidence here rebounded much faster than most other markets, there was certainly some pent up demand when people deferred international travel on the last part of the cycle, the strong Australian dollar and certainly the outstanding deals have all contributed to a very strong Australian result,” said Flight Centre managing director Graham Turner.

The company has reaffirmed its guidance of full-year pre-tax profit coming in between $160 million (£93 million) and $180 million (£104 million).

Flight Centre’s chief financial officer, Andrew Flannery, added strong Australian demand has more than offset losses in its US business, and weakness in the UK, Canada and New Zealand.

Unsustainable Prices

Flight Centre also predicted airfares are set to increase in 2010 from the “unsustainable levels” seen a year earlier as the economy picks up.

Mr Turner explained yields began to increase gradually during the first half of 2009/10, but were still well below traditional levels. “We believe prices will continue to rise moderately in the short to medium term, as airlines gradually move away from the unsustainable fares we saw last year,” he said.

Flight Centre declared a fully franked interim dividend of 26 cents per share, up from nine cents per share in the prior corresponding period.