Flight Centre boss Graham Turner warns high oil prices will hit international travel

With travellers already paying more to fly overseas than before Covid, Flight Centre boss Graham Turner warns rising oil prices could see airfares soar 15 per cent.

Flight Centre chief executive Graham Turner is tipping the cost of travel to jump 10 to 15 per cent on the back of oil price hikes in a further blow to the Covid recovery. Picture: Lyndon Mechielsen

A day after Qantas warned of a 7 per cent increase in airfares due to rocketing oil prices, Flight Centre managing director Graham Turner has suggested any increases are likely to be twice that.

Qantas chief executive Alan Joyce flagged an increase to the cost of airfares of 7 per cent if the oil price remained at $US120 a barrel, with a further 1 per cent lift for every $US4 jump in the oil price.

Mr Turner said if oil prices went to as high as $US200 a barrel, travellers would be looking at a 10-15 per cent increase in base fares, which were already considerably higher than pre-Covid.

“My guess is with airline cap­acity increasing, we should get back to pre-Covid international airfares over the next six months, but the cost of fuel could put 10-15 per cent on an airfare,” he said.

“I don’t think the cost will prove a major deterrent but the Ukraine situation will. If it settles down, travel will go up, but if it gets worse people will be more reluctant to travel. If the situation remains the same, people will get used to it and will still travel.”

He said travel operators like Flight Centre were “getting used to these kicks in the guts”, after Australian borders reopened, only for war to break out and fuel prices to skyrocket.

“Most of us have become fairly resilient now in terms of our business,” Mr Turner said.

“The only thing that would worry me now is all out European war, which is probably slim but it’s still an outside chance.”

Speaking on the sidelines of the QUT Business Leaders Forum in Brisbane on Wednesday, Mr Turner said he was committed to staying on as Flight Centre CEO for the next five to 10 years.

The 73-year-old told the forum, the travel retailer had shed 14,000 staff and closed 600 shopfronts in the past two years but hoped to return to profit by mid-year.

Flight Centre shares closed up 2.9 per cent on Wednesday at $17.70.

Originally published as Flight Centre boss Graham Turner warns high oil prices will hit international travel