Flight Centre says sales below 10pc of normal levels

Flight Centre is winning new accounts and generating some sales, but transactions in April were between 5-10pc of normal levels.

Flight Centre says total transaction volumes are between 5-10pc of normal levels. Picture: AAP

Flight Centre says it is continuing to win new corporate accounts and generating some sales despite the heavy travel restrictions in place.

However total transaction volumes in April were about five to 10 per cent of normal levels, the company said.

“There has been some ongoing activity in most countries and we are seeing a slight uptick in bookings in countries like China as travel and trading restrictions ease,” Flight Centre managing director Graham Turner said.

“Importantly for the future, we continue to win and implement new corporate accounts that will help drive TTV (total transaction volume) when conditions recover and normalise.”

While the time frame for recovery is unclear Flight Centre is anticipating an increase in activity in countries like Australia as soon as interstate borders reopen, which it expects will happen in the coming months.

Domestic travel represents roughly half of the leisure tickets the company normally issues in Australia, as well, as the overwhelming majority of its corporate volume, the company advised.

Flight Centre said it was “keen to work closely with local tourism bodies, airlines and other suppliers in the coming months.”

Flight Centre in April closed more than half of its shops globally, including 40 per cent in Australia, and stood down or laid off 6000 support and sales roles.

The company said it was on track to meet its target of reducing costs to around $65 million a month by the end of July, from an average of around $227 million a month before the coronavirus pandemic.

Flight Centre now expects the cost reductions will be achieved at less than the $210 million in one-off costs that it originally expected.

The Australian government’s JobKeeper subsidy and a 4.5 million euro government- backed loan in France are helping, it said.

The travel agent also on Saturday waived its usual cancellation fees when third party suppliers cancelled their services because of the virus.

At 11.17am (AEST), Flight Centre shares were down 7.5 per cent to $9.30.

AAP