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Redundancies to top 4000 as Flight Centre shuts another 90 stores

Business

Flight Centre will shut another 90 stores and a further 60 will remain in “hibernation” for the next six to 12 months.

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The company has not detailed which stores will be closed but said the retained Flight Centre shops had been carefully selected to deliver maximum convenience and effective coverage for customers, with about 95 per cent living within 5km of a retained shop.

The closures will mean that Flight Centre’s redundancies will total about 4000. Almost all of the affected employees were on stand-down before their positions became redundant.

The change is part of the company’s ongoing network management plan and will reduce overlap between shops in higher density areas, particularly in the Flight Centre brand.

The Flight Centre brand will retain a nationwide network of 332 shops in its flagship leisure brand, along with a variety of other connected channels that customers are using to transact and interact with the brand and its people.

It said the closures had been prompted by the continued domestic and international border closures, which have effectively grounded leisure travel in Australia for the past six months and led to billions of dollars in future travel bookings being cancelled.

Australian managing director James Kavanagh said the closures were not expected to impact the company’s longer-term leisure recovery plans given that the smaller but stronger Flight Centre brand shop network would house almost 2000 of the company’s best and most experienced travel agents.

“Without question, the past six months have been the most challenging period in our almost 40 years in business,” Kavanagh said.

“Never before had we imagined – let alone faced – a scenario whereby all discretionary travel would be halted for a prolonged period.

“Fortunately, we took steps early to secure our long-term future and to ensure we could survive for an extended period in a very low revenue environment, although we have still been forced to make some very tough decisions.

”We are incredibly sorry that some of our great people are not able to continue on their Flight Centre journey with us at this time but we are taking steps to preserve as many roles as possible for the future, while building a smaller but stronger overall network.

The company said the shop closures would not materially impact revenue, given that some costs were captured in the one-offs disclosed previously and additional costs should be recouped within a six to ten-month period.

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