Flight Centre is closing another 90 stores as border restrictions continue to shatter the travel industry

Photo: Scott Barbour/ Getty Images.

Flight Centre is closing more stores.

The travel agent announced that it is closing around 90 stores as domestic and international border closures grounded several flights and caused the cancellation of travel bookings over the past six months.

“Without question, the past six months have been the most challenging period in our almost 40 years in business,” Flight Centre’s Australian managing director James Kavanagh said in a statement. “Never before had we imagined – let alone faced – a scenario whereby all discretionary travel would be halted for a prolonged period.”

The company will be left with 332 stores, along with its website and call centres, with the smaller network of stores having 2000 employees. However, around 60 of these stores will remain closed over the next six to 12 months as heavy travel restrictions remain.

Flight Centre has continued to face challenges following the onset of the pandemic. In March, it announced the closure of 100 of its stores and later in In August, revealed that 70% of its 20,000 workers globally were either put on stand down, furloughed, or made redundant.

In Australia, around 4000 workers were made redundant over the past six months – nearly all of whom were stood down before being made redundant.

“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,” Kavanagh added.

In an effort to further reduce its costs, the company’s senior executives and board members chose to take 50% pay cuts during the fourth quarter of 2020.

In its latest annual report, Flight Centre highlighted that ongoing travel restrictions and border closures continue to affect the industry. During the 2020 financial year, the company reported $510 million in underlying losses before tax.

It added that it has paid full or partial refunds of $600 million in Australia and plans to return money to customers “as quickly as possible (generally within five days) after airlines and other suppliers return that money to [Flight Centre]”.

The company believes international travel won’t fully recover before the 2023 or 2024 financial year without an effective vaccine. However, it hopes to see sales grow during the year as travel bubbles open between countries and more reopening strategies are put in place.

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