Flight Centre closing stores en masse as coronavirus bites
Flight Centre is closing “underperforming stores” en masse as the coronavirus outbreak continues to smash the global travel industry.
Business
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Flight Centre will axe 100 stores as the travel sector is up-ended by the coronavirus outbreak.
The travel agency this morning announced up to 100 “underperforming stores” will be permanently closed by the end of June.
Flight Centre operates a network of 855 outlets which employ 1040 sales staff.
The company – whose share price has plunged by close to 60 per cent over the past three weeks – said staff would be redeployed to fill existing vacancies in nearby shops.
Chief executive Graham Turner, who this week urged the nation to stop panicking over COVID-19, said the company had experienced a “significant softening” in travel bookings.
The slump is expected to continue into April at a minimum, Mr Turner 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,” he said.
“As we saw with both SARS and the GFC in Australia, the rebound can be relatively fast and strong are a fairly significant downturn in international travel.”
Flight Centre also said it would no longer be providing a profit forecast for this financial year.
At its half-year results last month it warned COVID-19 would hit its bottom line which was expected to come in at between $240 million to $300 million for 2019-20.
The travel sector has been up-ended by the coronavirus with shares in Qantas Airways, Virgin Australia, Flight Centre and Webjet all losing more than half their value over the past three weeks.
Shares in Flight Centre plunged another 15.3 per cent this morning to $16.56 amid a wider bloodbath on the local bourse.
The company’s share price was trading at $39.48 on Feb 21.
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