Flight Centre to stand down or sack 6000

Brisbane travel giants Flight Centre and Virgin Australia are reeling from the impact of the coronavirus outbreak and have revealed they may have to retrench some staff.

Virgin Australia worker at Brisbane Airport this week.

Brisbane-based travel giant Flight Centre says an initial 6000 of its global sales and support staff will either be stood down or made redundant in the company’s latest bid to preserve a future.

In Australia, where government has installed international travel bans and domestic border controls, about 3800 people in sales and support roles will temporarily stand-down.

This follows similar recent moves by other travel businesses, including Qantas, Virgin Australia and Helloworld.

Virgin Australia chief executive Paul Scurrah said more than 1000 workers would likely be made redundant from the 8000 asked to stand down from their jobs as demand for air travel plunges.

“This is the worst airline crisis the world has ever seen,” Mr Scurrah on Thursday told ABC TV.

He said Brisbane-based Virgin was talking to major employers about trying to find work for its affected employees.

At Flight Centre, a total 6000 support and sales roles across the globe will either be stood down or, in some instances, become redundant.

The company said it will initially retain up to 70 per cent of its 20,000 global workforce but will, however, assess further reductions as the pandemic evolves. “These never-before-seen restrictions, which have forced airlines to ground their fleets and heavily reduce their flight schedules, have virtually halted travel demand and led to the stoppage of the vast proportion of work that Flight Centre’s people previously carried out,” the company told the ASX.

Flight Centre said it now expects to close 30 per cent of its stores in Australia and around 35 per cent globally over the next few months.

“Changes to these plans are likely if market conditions deteriorate further, if restrictions are in place for an extended period or if demand rebounds more rapidly than currently expected,” the company said.

Flight said said it had initiatied an immediate 50 per cent pay reduction for senior executives and board members until the end of the financial year. Executives will also forgo all short-term incentive payments for the year. The firm said it had also moved to reduce rent costs by renegotiating agreements with landlords.

Flight Centre managing director Graham Turner. Photographer: Liam Kidston.

Flight Centre CEO Graham turner said the company had been forced to make extremely difficult decisions, including standing down staff and cancelling the interim dividend.

“These people that we are temporarily standing down are a valuable part of our company, and, where possible, we aim to bring them back to work as soon as restrictions are lifted and as demand starts to increase,” he said.

Helloworld has announced it will be sacking 275 people across its global network and standing down another 1,300 workers.

Qantas is standing down 20,000 of its 30,000 workforce.

Virgin Australia worker at Brisbane Airport this week.

Westpac forecasts there will be over 814,000 job losses leading to an 11 per cent unemployment rate by June as a result of coronavirus disruptions. Flight Centre had already announced it would close up to 100 underperforming stores and has scrapped its earnings guidance amid mounting airline service cuts and widening travel bans.

This week it cancelled its 40 cent interim dividend to save $40.1 million and its shares were voluntarily suspended from trading on Monday after plunging nearly 80 per cent this year to $9.91.

Originally published as Flight Centre to stand down or sack 6000