Flight Centre guidance withdrawn, 100 stores to close

Flight Centre (ASX: FLT) shares were down 11 per cent at the time of writing after the travel agency suspended guidance due to coronavirus uncertainty.

The company had previously forecast underlying profit before tax (PBT) between $240-$300 million.

Although total transaction value (TTV) is in line with trends for the half, the virus's spread and the subsequent increase in travel restrictions have made it more difficult to predict the full-year impact or a timeframe for recovery.

The announcements coincided with Flight Centre's (ASX: FLT) decision to close 100 underperforming stores, with plans to transfer transactions and staff to other shops while investing in new models.

Managing director Graham Turner says Flight Centre will draw on its experiences with SARS in 2003 and during the Global Financial Crisis in 2009 by seeking to stimulate demand, while also implementing sensible cost reduction strategies to maintain its balance sheet strength.

"While people are still booking travel in February, our TTV actually increased slightly globally compared to the same month last year we are now seeing significant softening and expect this to continue into April at least," says Turner.

"Within this uncertain environment, our priorities are to reduce costs, while also ensuring that we and our people are ready to capitalise when the steep discounting that is underway across most travel categories starts to gain traction and as the trading cycle rebounds.

"As we saw with both SARS and the GFC in Australia, the rebound can be relatively fast and strong after a fairly significant downturn in international travel."

Updated 10:50am AEDT on 13 March 2020


Help us deliver quality journalism to you.
As a free and independent news site providing daily updates
during a period of unprecedented challenges for businesses everywhere
we call on your support

Four ways businesses can use artificial intelligence to triumph in 2022
Partner Content
The last two years have delivered major disruption to the technology industry and broad...
PROS
Advertisement

Related Stories

QLD Premier confirms borders to reopen four days early

QLD Premier confirms borders to reopen four days early

With Queensland health authorities expecting the 80 per cent double...

Will Australia follow Europe into a fourth COVID wave?

Will Australia follow Europe into a fourth COVID wave?

Europe is facing a fourth wave of COVID. As we watch on, it is reas...

International students, skilled workers welcome next month, travel bubble extends to Japan and Korea

International students, skilled workers welcome next month, travel bubble extends to Japan and Korea

Fully vaccinated students, skilled workers, working holiday makers,...

Victoria to lift venue and visitor caps tonight with 90 per cent full vaccination milestone in sight

Victoria to lift venue and visitor caps tonight with 90 per cent full vaccination milestone in sight

“Whether it’s 100,000 people at the MCG on Boxing Day, ...