Travel surge hampered by lack of Chinese flights: Flight Centre boss Graham Turner

Flight Centre continues to bemoan the lack of international flights out of Australia and warns that the mix of its post Covid-19 business may hit its margins.

Flight Centre, led by Graham Turner, is concerned about the lack of international flights out of Australia and warns that the mix of its post Covid-19 business may impact its margins. Picture: Tara Croser

As the travel industry surges towards recovery, Flight Centre continues to bemoan the lack of international flights out of Australia and warns that the mix of its post Covid-19 business may impact its margins.

Co-founder and managing director Graham Turner says the major issue for the company was the lack of international flights which are substantially down on pre-Covid-19 levels and the fact that domestic travel including flights pay less margins than international travel bookings.

“The Chinese carriers are not coming back obviously at the moment. Quite a few of their carriers are using their planes for freight,” Mr Turner said in an interview from London.

Prior to Covid-19, Chinese carriers such as China Southern Airlines operated three weekly direct flights between Cairns and Guangzhou while China Eastern Airlines serviced other capital cities.

“By Christmas this year we will have a pretty good idea of where we are, it’s just whether the mix of traffic is the same as it was pre-Covid,’’ Mr Turner said.

“At this stage our business is more domestic travel bookings so the margins are less than they were in 2019 prior to Covid. International air capacity is our biggest issue at the moment.”

“We can’t get enough seats, particularly for international flights, but domestic is not too bad.”

However, Mr Turner said Flight Centre was back in positive cash flow territory and had produced profits in March, April and May.

International flights were back to 50 per cent capacity but they needed to be back to about 80 per cent to produce good financial results for Flight Centre.

“But generally for the next six months we are confident we will be back to 2019 levels of total transaction volumes and hopefully our profits will flow back to 2019 levels,” Mr Turner said.

Most Australians are heading to the UK, Europe, particularly France and Italy and North America with New York and Los Angeles the favoured destinations. South East Asia has been slower to recover with China and Japan still closed to international leisure tourists and Bali’s international flights operating at around 30 per cent of pre-Covid-19 levels.

Bookings to Thailand, Vietnam and Cambodia are picking up with operators such as Wendy Wu reporting good land tour bookings into these destinations. In an interview last week, Ms Wu said her bookings into Vietnam and Cambodia were strong.