FCTG plan to tackle “prolonged coronavirus-driven travel downturn”.
Flight Centre has just announced major changes in response to the COVID-19 crisis, which has already seen the company’s total transaction value (TTV) slump to just 20-30% of normal levels globally this month.
Key measures include the temporary reduction of the company’s 20,000 person global workforce “to better reflect the prevailing trading climate and to preserve future jobs”.
About 6,000 support and sales roles will either be stood down temporarily or in some instances made redundant, meaning Flight Centre will “initially retain up to 70% of its global workforce”. The company said it was assessing the timing and nature of further reductions.
In addition, with the likelihood of a prolonged downturn in demand, Flight Centre has accelerated and extended its leisure shop closure plans globally “and could now close about 30% of its leisure outlets across multiple brands in Australia and in the order of 35% of its leisure shops globally over the next few months”.
However changes to these plans are likely if market conditions deteriorate further, if restrictions are in place for an extended period, or if demand rebounds more rapidly than currently expected, the company said.
Immediate 50% pay reductions for senior executives and Board members are in place, while Flight Centre has also moved to significantly reduce occupancy costs by renegotiating rental agreements with landlords.
The company has paused its $15 million monthly sales and marketing spend, as well as various non-essential projects.
“We are dealing with unprecedented restrictions and extraordinary circumstances that are having a significant impact on our customers, people, suppliers and all other stakeholders,” said MD Graham Turner.
More details in today’s issue of Travel Daily.