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Refund pain for Flight Centre hits $1 billion as Skroo slams border closures

Business

Flight Centre has revealed that it has refunded about $1 billion in travel bookings since the start of the COVID-19 as its chief executive claims borders must open no matter what the infection rate is.

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But Flight Centre managing director Graham “Skroo” Turner said some international travel may only be a few months away.

“We think that probably over the next nine months there will be certain bilateral arrangements. It’s already opening up intra-Europe and we think north America will probably open in the next couple of months,” Turner told a Morgan’s Stockbroking podcast.

“In the next six to nine months you will see various international routes re-opening and it probably won’t be until the middle of next year (before there is) a more widespread re-opening of international routes.

“That maybe with some sort of vaccine or not and if you are an international traveller you may need a vaccination or proof of vaccination. ”

Turner also said that Flight Centre did not have the systems to cope with the huge demand for refunds when the borders were closed earlier this year, but it now had about 1500 people working fulltime on refunds.

The issue was damaging for Flight Centre as thousands of customers vented their frustration over delays in refunds, many of which were from third parties.

“We had probably close to $1 billion of refunds over a period of time. We are an organisation that’s not built to refund 100 per cent of customers. We had some teething problems with that. We are pretty good at it now,” he said.

Turner was also critical of the strategies used by governments to deal with the pandemic and said copying China’s lockdown strategy didn’t work in western democracies.

“It’s absolutely essential that borders open and stay open regardless of infection rates. I think if you look at the real problem in Australia – and it’s been the same in Sweden and the UK – it’s really been in the aged care and some of the hospital sectors where most of the deaths have happened and unfortunately it’s a real pity governments did not realise that. We have been in this six months now and surely it was obvious from overseas that this is where the problems were happening.

“If they had managed to clean their act up early on in the aged care sector there just would not be the necessity for the lockdowns and border closures.

“The original idea was containment of the virus so the intensive care units could cope. We have never got anywhere near that and most governments will realise fairly soon that whether we have a vaccine or not we have to reopen and I think we will get back to a level of normality in the next six to 18 months, but there is still going to be a level of pain in a lot a business and unemployment, particularly younger people.”

Turner said that although some international travel would soon emerge it would not be until 2023-24 before it was back to pre-COVID levels.

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