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Flight Centre to close 100 stores, but ‘well placed’ to take on challenges

Australia’s largest travel agency group Flight Centre (FLT) will close up to 100 stores as part of drastic new measures to combat short term challenges brought on by coronavirus.

In a statement on the Australian Stock Exchange (ASX), Flight Centre Travel Group announced that up to 100 of its under-performing leisure stores in Australia would likely close before 30 June, “with sales staff to be redeployed to fill existing vacancies in other shops nearby”. 


With around 1,040 leisure sales teams spread across 855 sites throughout Australia, FLT will also reduce trading hours in some stores, expand flexible work arrangements to allow some staff to switch from full to part time, urge staff to take leave during March and April, put a freeze on recruitment, defer some non-essential projects and expenditure and decrease executive earnings during FY20.



FLT directors will also lose 30% of their fees until at least 30 June. FLT’s short term measures are part of its transformation plans and network rightsizing program, which will see the group reduce its traditional leisure footprint in Australia over the next few months.


Elsewhere, FLT says that it will continue to invest in: 

-New, unique and attractively priced product ranges for customers

-Supplier promotions and internally-driven initiatives to give customers more security when booking travel 

-Leisure e-commerce capabilities to capitalise on strong growth it has achieved during recent periods


Meanwhile, FLT has put a freeze on its 2020 fiscal year (FY20) guidance, in light of coronavirus’s ongoing impact on leisure and corporate travel. 


FLT managing director Graham Turner said while people are still booking travel, “we are now seeing significant softening and expect this to continue into April at least”.


“Within this uncertain environment, our priorities are to reduce costs, while also ensuring that we and our people are ready to capitalise when the steep discounting that is underway across most travel categories starts to gain traction and as the trading cycle rebounds,” he said.


“As we saw with both SARS and the GFC in Australia, the rebound can be relatively fast and strong after a fairly significant downturn in international travel.”


Mr Turner said that while the outlook and timeframe for recovery remained unclear, FLT was well placed to overcome challenges.


“In the near-term, we will proactively seek to win leisure market-share by investing in sales and marketing – at a time when some of our competitors may be forced to pull back – to increase our share of voice …” he remarked.


The Flight Centre boss added that FLT aims to highlight destinations that are currently considered to be lower risk, including Australian domestic and South Pacific, the great value we are now seeing and “the initiatives that we and our key suppliers are introducing to give travellers greater flexibility and additional peace of mind surrounding their future bookings”. 


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Written by: Mark Harada

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