- Flight Centre NZ would be slashing 160 jobs and shut down 23 stores, as a consequence of COVID-19 induced travel restrictions.
- Flight Centre Travel Group reported a statutory loss before tax of A$849 million in FY20 compared to A$343.5 million profit before tax a year earlier.
- The decision of store closures and job cuts was made to ensure the viability of the business and to protect customer credits.
After massive cuts in early 2020, Flight Centre New Zealand in a further move of restructuring would slash 160 more jobs and shut down 23 stores as pandemic continues to halt overseas travel.
The travel entity stated that majority of the employment cuts would happen in the retail arm and follow the list of ~600 workforce throughout the Company, who have been made unwanted or left willingly after COVID-19 outbreak.
Flight Centre NZ Ltd is a part of the Flight Centre Travel Group, an Australian owned travel agency that has operations in 14 nations, employs above 19,000 people worldwide and has about 2,800 stores.
The Company had 1,200 personnel and beyond 130 stores at the beginning of 2020, but it announced the closure of 58 stores in April.
David Coombes, MD of Flight Centre NZ, stated that the restructuring plan was not an easy decision, but it had to be made due to COVID-19’s impact and subsequent border restrictions. He also added that the Company’s employees had the option of voluntary redundancy, and a few accepted it.
He added that these individuals would be able to receive the COVID relief payout from the government, and the designation has been given to those who wanted to continue with the Company.
Flight Centre Travel Group Limited (ASX:FLT) FY20 performance
The Flight Centre Travel Group incurred a loss during March-June 2020 period, as the government locked borders due to COVID-19 outbreak that halted/restricted leisure and corporate travel worldwide. However, the Group posted a A$20 million profit during 8 months to 29 February.
Some of the results of the Group for FY20 ended 30 June included the following:
- Statutory loss before tax stood at A$849 million in FY20 compared to A$343.5 million profit before tax in FY19.
- However, the Group secured more than A$1.1 billion in additional cash and liquidity, which included the A$700 million capital raising and A$200 million debt facility increase in April.
- The Group reduced its cash burn by significantly lowering its monthly cost base from its A$225 million-A$230 million pre-COVID level.
Source: FLT Annual Report 2020, dated: 1 August 2020
Flight Centre last traded on ASX at A$13.73, up by 1.85% from its last close.
Initiation of other schemes
Flight Centre NZ Ltd unveiled Project Remedy earlier this year, which is a scheme formed to aid in finding employments for those in the travel industry who are seeking employment because of COVID-19.
Flight Centre NZ also benefitted from NZ$47.6 million travel reimbursement scheme to keep travel agents afloat and received NZ$11.1 million in wage subsidies from the government.
Mr Coombes stated that due to the sealed border, the Company was compelled to ensure viability, secure the refunds and credits of consumers and then, opening up the world to New Zealand as border controls ease.
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