Flight Centre recovery hampered by lack of airline carriers, staff

The travel company is being impeded by a lack of staff here and in key overseas markets as well as the dearth of international carriers servicing Australian cities.

Flight Centre chief executive Graham Turner expects capacity to return to 100 per cent by Christmas. Picture: Tara Croser.

After 24 months of straight losses global travel group Flight Centre started turning a profit in March, but it is still being impeded by a lack of staff in Australia, North America, New Zealand and the United Kingdom as well as the dearth of international carriers servicing Australian cities.

Assuming no more government imposed Covid restrictions managing director Graham Turner reckons it will be smooth sailing from here and he predicts airline capacity out of Australia will return to pre-Covid levels by Christmas.

“Australia has been pretty late coming back,” Mr Turner said on Wednesday.

At present Mr Turner said there were few carriers except for Qatar – which he expects will further increase capacity – operating at full or better than pre-Covid capacity out of Australian cities at present.

“Qatar is higher than pre-Covid levels,” Mr Turner said, adding that its Middle Eastern rival Emirates is not even yet flying out of Adelaide and is only doing one flight out of Brisbane where it used to do two daily flights.

He took heart that Air Canada will restart services in late June or early July.

“I think capacity is 60 per cent pre-Covid, we think it will be around 100 per cent by Christmas, it will take a while particularly with Asia,’’ he added.

Mr Turner said Australia lagged the rest of the world, except for Asia, with the return to international flying.

“It is partly due to all the restrictions, airlines have had their planes parked in the desert and they take quite a few weeks to get ready and until they knew restrictions would be lifted for good they would not take the risk,” he said.

“It takes time for the international guys... there was a lot of uncertainty, they don’t really know when Asia will be fully open, with Northern Asia, Japan, China, there are still restrictions with Korea and Taiwan. With places like Singapore, Indonesia, Thailand they have opened up but there are still a lot of restrictions in North Asia, and a lot of those Asian carriers are not coming into Australia.

“Cathay Pacific was a big carrier into Australia and they have very limited capacity into Australia now, they are still flying in freight. It’s still seven-day quarantine if you fly into Hong Kong.’’

Meanwhile, Mr Turner said this week’s interest rate hike would not affect his business as much as the lack of staff.

“It won’t affect us as a business much at all but obviously it could affect our consumers spending. It will put a bit more pressure on household expenses. We are not concerned. Of all our issues it is not a big one.

“Our biggest issue is staffing, customer-facing staff is a major challenge, we are solving it. We have the same problem in the UK, North America, and Europe, we are in about 28 countries, and generally it is not bad but we have a shortage in Australia, New Zealand, United Kingdom and North America.”

Mr Turner said the company had gone from significant monthly losses in December and January to March where it had produced a small but significant earnings before income, tax, depreciation, and amortisation (EBITDA) profit.

“We think from now on we will be growing our EBITDA profit from month to moth and that is pretty significant for us given we have had 24 months of losses. March was our first profitable month.”

Flight Centre shares closed down 6.7 per cent on Wednesday, at $21.19.