Flight Centre has used its annual general meeting to point the finger at state governments still reluctant to open borders despite minimal levels of community coronavirus transmission.
In his opening statement, Flight Centre chief executive Graham Turner said the global travel agency group had noticed a “significant uplift” in demand as domestic and international restrictions eased.
However, he warned the rigid border positions adopted by states such as Queensland were having “devastating” consequences.
“We do, however, question the need to delay reopenings given the very low level of community transmission throughout Australia and the devastating impacts closures are
having on society, particularly families, and the broader economy,” Mr Turner said in address to shareholders.
Flight Centre CEO Graham Turner said there was ‘decision-making paralysis’ in Queensland. Picture: Annette DewSource:News Corp Australia
“There also appears to be decision-making paralysis in Queensland, with the state
government adopting a set position that it will only consider border reopenings towards the
end of each month rather than simply moving as quickly as possible, which appears the
more logical position to adopt on an issue as important as this.”
Mr Turner welcomed the NSW government’s decision to set a date for the relaxation of border restrictions with Victoria that will allow more flights to operate between Melbourne and Sydney.
Flight Centre’s leisure and commercial travel businesses were brought to a halt at the beginning of the pandemic, with the majority of its earning ability stopped as domestic and international travel ceased.
The Queensland-based travel group at its 2020 financial results revealed the health crisis had caused a loss of $849 million, with Mr Turner saying the pandemic had created the worst operating conditions in the company’s 40-year history.
Mr Turner said the company’s corporate travel business was tracking at 18 per cent of operations, while its leisure retail operations were at 8 per cent of pre-virus levels.
The Queensland-based travel group has revealed the health crisis has caused a loss of $849 million. Picture: Asanka Ratnayake/ Getty ImagesSource:Getty Images
The company anticipates there is pent-up demand from customers wanting to travel after border restrictions ease.
Flight Centre flagged it had $1 billion of available liquidity to prop up the business for a number of years, while expected revenue is expected to be subdued.
In its outlook, Flight Centre said it did not expect its leisure business to return to profitability until financial year 2022.
Flight Centre chairman Gary Smith said the outlook for the global travel industry remained highly uncertain but was confident the brand could be rejuvenated in the coming 12 months.
“We now have a significantly lower global cost base and an extended liquidity runway, which
should allow us to overcome a deep and prolonged downturn,” Mr Smith said.
“This strength will also allow us to capitalise on opportunities that will inevitably arise in the future.”
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