Flight Centre to close up to 100 underperforming branches
Queensland-founded Australian travel giant Flight Centre will close up to 100 stores within a matter of months as the coronavirus continues to cripple the global travel industry.
QLD News
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FLIGHT Centre will close up to 100 underperforming stores before June 30 as the coronavirus continues to cripple the global travel industry.
The underperforming stores are expected to close within months and sales staff redeployed to fill existing vacancies in other shops.
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What stores will close has not yet been revealed by the company.
Flexible working arrangements will be offered, store trading hours reduced and staff urged to take leave as part of the cost-cutting measures.
Flight Centre will also freeze the hiring of new workers.
Flight Centre Managing Director Graham Turner said the company was prepared to overcome challenges.
“We are now seeing significant softening and expect this to continue into April at least,” he said.
“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.
“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 the company would invest in sales and marketing “at a time when some of our competitors may be forced to pull back.’’
He said low-risk destinations included Australian domestic and South Pacific holidays.
Flight Centre previously lowered its earnings guidance to between $240m and $300m, down from $310m-$350m.
The closures come after Flight Centre shares halved in value in three weeks as the sharemarket selling frenzy intensifies.
The rapid plunge has wiped $300 million off the value of Mr Turner’s 15 per cent stake in the Brisbane-based travel agency firm.
Flight Centre’s competitor Corporate Travel Management has announced this morning it has dropped its earnings guidance, declaring the coronavirus “more severe” than previously thought.
On February 29 the corporate travel booking company slashed its earnings to $125m-$150m, down from $165m-$175m announced in November.
It has now dropped the guidance altogether due to the ongoing uncertainty.
Corporate Travel Management blamed government action to close borders and suspend travel and decisions by companies to ban or limit travel for the hit.
“Whilst the timeframe for a return to normal levels of activity is unknown, we do expect current activity levels to recover,” the statement said.
Originally published as Flight Centre to close up to 100 underperforming branches