At the end of one of the most difficult years in recent memory for travel retail, Flight Centre is expecting to report a full year statutory loss of between $825 million to $875 million.
The business achieved an underlying profit before tax of around $150 million in the eight months to February 29, before widespread travel restrictions were applied. From then, however, significant losses were incurred while the business worked on lowering its cost base and processing tens of thousands of refunds.
“Covid-19 and, specifically, the government responses to it have clearly had devastating impacts on businesses worldwide and on the airline, travel, tourism and hospitality industries in particular,” said Flight Centre managing director Graham Turner.
“This has severely impacted us and our people and some very tough decisions have been made over the past four or five months.”
Turner notes that revenue is beginning to increase as lockdowns worldwide are slowly lifted, and the business has now surpassed its initial cash flow target.
However, there are further challenges to overcome moving forward, as well as the ongoing uncertainty around government strategies. Constantly changing restrictions, both locally, nationally and internationally, make it very difficult for the travel sector to find its feet.
“Within the travel and tourism sectors we need to know what Covid-19 conditions need to be present in each state, territory and at a national and international level for government to ease restrictions, stop lockdowns and open borders,” Turner said.
“This will allow businesses to plan for the future, to prepare to restart their operations and to bring back thousands of our people who are currently on stand-down.”