Covid-19 impacts Flight Centre business

Flight Centre Group says the coronavirus will have a significant impact on its business this year, and it will close up to 100 underperforming outlets in Australia.

In a statement to the ASX, the company downgraded its full-year profit expectations from between A$310 million (NZ$317.8m) and A$350m to between A$240m and $300m. Managing director Graham Turner said the company would draw on its experiences with Sars and the global financial crisis to seek to stimulate demand, as customers shied away from travel.

It would highlight lower-risk destinations such as Australia and the South Pacific, the value available in the market and the flexibility available for bookings.

Up to 100 under-performing shops would close by June 30, Flight Centre Group said, and staff would be deployed in other shops. Executives would not receive any of their shortterm incentives for the full year.

Flight Centre New Zealand is understood not to be affected by the planned store closures.

‘‘Having said that, these are challenging times and our travel experts are working around the clock to provide support for our customers,’’ David Coombes, managing director of Flight Centre NZ, said.

He his team had asked staff to be cautious about non-essential spending and for those who had excess leave to look to reduce it.

‘‘There’s no disputing that Covid19 is having a significant impact on the travel industry world-wide, the extent of which we can’t yet know. Having said that, this is not the first time we’ve faced a crisis.

‘‘Flight Centre has been booking Kiwis’ travel for over 30 years, and over that time we’ve just about seen it all. GFC, Sars, September 11 – these have all triggered a sudden drop in customer demand from Kiwi travellers – but every time, we’ve found our way through and come back stronger than before. This experience has us well versed in how to adapt and protect our customers, our people and our business.’’