- Flight Centre Travel Group (FLT) has released its annual report for FY20, and the outlook is bleak — with travel not expected to return to normal until 2024
- COVID-19 has decimated the travel business, with Flight Centre posting an eye-watering statutory loss of $849 million
- 70 per cent of the travel group’s staff have either been laid off or furloughed as border restrictions severely grounded flights
- The company also had to close about half of all of its flight centre stores across the globe
- The FLT Chairman described FY20 as the company’s “most eventful and challenging trading period” ever encountered
- Shares in Flight Centre have ended the day up 2.69 per cent at $14.14
Flight Centre Travel Group (FLT) has released its annual report for the 2020 financial year and the outlook is bleak — with travel not expected to return to normal until 2024.
In his opening address to shareholders, Flight Centre Chairman Gary Smith said FY20 had undoubtedly been the “most eventful and challenging trading period” ever encountered by the group.
While CEO Graham Turner warned it could be years before the travel business returned to normal, as COVID-19 continues to wreak havoc on the whole sector — grounding flights across the globe.
“FLT believes demand for international travel, which is the leisure business’s primary revenue source, will not fully recover before FY23 or FY24 in the absence of an effective vaccine,” Graham explained in today’s annual report.
But, the travel company is hopeful of sales increasing in FY21, as regional and domestic travel begins again in Australia as border restrictions are eased.
In total, Flight Centre ended June 30, 2020, with an eye-watering $849 million statutory loss before tax. The loss is almost entirely attributable to COVID-19, with the company previously on track to record a profit in FY20.
FLT estimates it has refunded around $600 million to customers since the disruptions began in March, with the number of flights coming in and out of airports reducing by over 95 per cent.
As a result of the losses and downturn, Flight Centre has either laid off or furloughed 70 per cent of its 20-thousand strong workforce. It’s also had to close at least half of all of its global leisure stores.
The employees who are still employed have been receiving government assistance, which Flight Centre expects to continue throughout FY21. From JobKeeper alone, the company expects to receive up to $80 million in wage subsidies.
Going forward, FLT said its focus would be on reviewing the company’s debt structure, which includes a $350 million cash covenant, to ensure Flight Centre has enough funds for the medium to long-term. The company ended FY20 with $1.9 billion cash balance —including around $1.1 billion in liquidity.
Following today’s annual report release, shares in FLT have jumped up a slight 2.69 per cent at $14.14 each at the market close.