Flight Centre in talks with staff over closing 23 more stores, job losses

More than half of Flight Centre's stores could close. Photo: Michael Cunningham
More than half of Flight Centre's stores could close. Photo: Michael Cunningham
Flight Centre is in talks with up to 165 staff about possible job losses and could close another 23 stores as the pandemic continues to paralyse overseas travel.

The company will not comment on the figures supplied by an informant, but says it is consulting with ''a number'' of employees affected by the impact of Covid-19 on its business.

''We cannot comment further at this time as this is a confidential process and we are focused on supporting our people,'' a representative for the firm said.

Any further job losses would be on top of about 600 across the group who have been made redundant or left voluntarily since the pandemic struck. Flight Centre had 1200 staff and more than 130 stores at the start of the year.

Further store closures would be on top of 58 that were announced in April.

Travel restrictions have practically halted travel overseas by Kiwis and although the firm handles some domestic corporate bookings they are a small proportion of revenue for the firm.

Last month the global travel group reported a A$662 million net loss ($718m) for the 12 months to June 30, compared to a $264m profit the year before. It was its first loss since being listed on the Australian sharemarket 25 years ago. New Zealand figures are not broken out.

The group, however has A$1.1 billion in available liquidity, boosted in April by a $700m capital raising and $200m debt.

Store closures cut outlets in Australia from about 900 to 520, and globally from 1500 to 800.

To help staff who left the firm here, Flight Centre established Project Remedy to help provide supplementary income for those financially affected.

The firm has worked with more than 200 companies across New Zealand, sourcing roles and distributing these opportunities to all impacted Flight Centre staff.

Flight Centre NZ managing director David Coombes. Photo: Greg Bowker
Flight Centre NZ managing director David Coombes. Photo: Greg Bowker
Its New Zealand managing director, David Coombes, said those remaining with the company were on reduced pay.

The impact of Covid-19 had been sudden and dramatic, he said in an internal paper about the firm's experience of managing it.

''Our objective changed from mitigation and protection measures to survival mode. Survival required bold, extreme and often impossible decisions made at a pace we have never operated at previously.''

The company has been paid more than $11m in the three tranches of wage subsidy and with other travel agents is in talks with the Government over targeted industry assistance to keep it going.

The agents say they are working to recover up to $2b Kiwis have spent overseas on travel. They argue they are crucial to the recovery of inbound tourism as airlines base decisions to fly here on how many Kiwis they can carry out of the country.

  • A creditors meeting will be held today for a different travel agent, STA, which fell into voluntary administration last month. Administrators Deloitte have permission to hold the meeting for hundreds of creditors virtually due to Covid restrictions.

Deloitte has warned travellers that anyone with bookings should contact their airline, hotel or travel operator.

''You can also consider contacting your credit card provider if travel bookings were paid by credit card.''

 

 

 

 

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