Hong Kong - Australia’s Flight Centre has finally sealed a 50-50 joint-venture agreement with China’s third largest agency, China Comfort Travel, making it the second strategic investment in Asia following the acquisition of Hong Kong-based American International Travel in August 2002.

In Beijing and Shanghai, the business travel operation has been renamed Flight Centre-Comfort.

The deal sees Flight Centre paying US$1.25 million to Comfort, with each joint-venture partner contributing US$750,000 of equity into the business.

It acquired the stake held by Comfort’s previous foreign joint-venture partner Rosenbluth International, after initially entering into a short-term management arrangement after Rosenbluth’s departure.

The departure was brought about by American Express’ takeover of Rosenbluth International in 2003, which presented Flight Centre with a unique opportunity. Apart from Australia, Hong Kong and China, Flight Centre also operates in New Zealand, South Africa, UK, US and Canada.

Flight Centre chairman, Mr Norman Fussell, said China had become a key link in the global business travel market and corporate clients now expected their travel provider to have a presence in the country.

“We would assume day-to-day management, systems and financial control, whereas China Comfort will contribute local expertise, knowledge and its extensive network of leisure-oriented travel agencies,” Mr Fussell said.

Flight Centre-Comfort has projected a total transaction value of US$14 million for the 2003/2004 fiscal year.

According to Corporate Traveller AIT national leader, Mr Jonathan Kao, more than 300 of the Fortune 500 companies are in China and more have plans to set up office there and demand in total travel management solution is increasing.

“We are now able to tap into the fastest growing market in the world and we feel there is a gap in the supply of western-styled travel management in China, still in its early development stage.

“We need to look no further to see this change as more and more corporate RFPs (requests for proposals) include China as part of the requirement and increased value of business volume,” he said.

“In some instances, the total volume of China is higher than that of Hong Kong, and this is definitely a trend that will continue in the long run.”

Flight Centre, he added, was now able to offer a complete Hong Kong-China solution to all its clients and potential clients.

“In addition, the joint venture enables us to provide information and benchmarking our clients will require when formulating their travel policies and aid them in their decision-making process,” Mr Kao said.