Flight Centre To Close Up To 100 Stores As Coronavirus Plummets Profits
Travel agency Flight Centre will close up to 100 stores and has scrapped its earnings guidance due to the coronavirus outbreak.
The company said on Friday the stores will close before June 30, and sales staff will transfer to other stores, as part of a move to slash costs.
Flight Centre brands include Escape Travel and Student Flights.
Managing director Graham Turner said reducing costs was priority in an uncertain environment.
He reported significant softening in bookings, which he expected to continue into April at least.
Management told the share market that while early trends had been in line with expectations, the virus' spread and travel restrictions made it more difficult to predict the full-year impact.
"Given this uncertainty, the company has elected to suspend its revised FY20 guidance," Flight Centre said.
The guidance on February 27 was full-year profit before tax of $240 million to $300 million, down from the previous range of $310 million to $350 million.
Flight Centre directors will also forgo 30 per cent of their fees for the remainder of the financial year.
Some stores will reduce their trading hours, and staff will be encouraged to take leave.
Recruitment will be suspended, and non-essential projects deferred.
Flight Centre shares were down by 17 per cent at $16.26 by 1148 AEDT and have lost 60 per cent of their value since February 20 amid a wider market sell-off.
The travel industry is one of those hardest hit by the virus and travels bans.
Many people have cancelled travel, prompting airlines and other businesses to cut the number of flights and services.
On Friday Virgin Australia joined rivals Qantas and Air New Zealand in reducing capacities for international and domestic flights more than once in quick succession.