Flight Centre to close 90 stores as pandemic impacts thrash travel industry

Flight Centre to close 90 stores as pandemic impacts thrash travel industry

90 Flight Centre (ASX: FLT) stores will close as part of the company's plans to work within the decimated travel sector.

Flight Centre general manager Kelly Spencer said the closures will not impact the company's refund programs or customer holiday plans in the works.

"We are sad to see these doors close as we know some of our amazing travel experts made your travel dreams a reality in these stores," said Spencer.

"Please know that all of us at Flight Centre thank you and will continue to support you, and all Australians, with their travel needs for another 40 years because the minute those borders open, we know that you, our customers, will be raring to go!"

The company's remaining 332 stores will stay open, all of which are located within five kilometres of 97 per cent of the company's customers.

In late August the company announced the impacts of COVID-19 resulted in a $849 million statutory loss before tax, down significantly from a $343.5 million profit in FY19.

Prior to border restrictions being implemented the company had achieved a $150 million underlying profit for the eight months to February 29, 2020, plus record total transaction value.

To reduce group expenditure about 70 per cent of FLT's workforce was stood down or made redundant.

Senior executives and board members saw 50 per cent pay reductions in the fourth quarter of FY20, plus ongoing reductions through FY21.

"We were forced to make some very tough decisions as this crisis unfolded, but we were very fortunate to be able to draw on our strong balance sheet," said FLT managing director Graham Turner.

"COVID-19 and, specifically, government responses to it have created the most challenging trading environment that we have experienced in our almost 40 years in business.

"This extraordinary trading environment has already had a devastating impact on businesses and on people, particularly those in aviation, travel, tourism and hospitality sectors, with tens of thousands of jobs lost in Australia alone and many businesses struggling to survive."

Shares in Flight Centre are up 2.69 per cent to $14.14 per share at 3.59pm AEST.

Updated at 4.43pm AEST on 1 October 2020.

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