Flight Centre

Flight Centre Travel Group (FCTG) is a large retail travel agency in Australia. It was founded in 1982, and is headquartered in Brisbane, Australia.

Flight Centre Travel Group
TypePublic company
ASX: FLT
IndustryTravel
Founded1982 (1982)
HeadquartersBrisbane, Queensland, Australia
Key people
Graham Turner[1]
ServicesTravel agency
Number of employees
6,000 (July 2020)[2]
DivisionsFlight Centre Australia
Flight Centre UK
Flight Centre Canada
SubsidiariesOlympus Tours
StudentUniverse
FCM Travel Solutions
Liberty Travel
Aunt Betty
Flight Centre Exclusives
Websitewww.fctgl.com (corporate)
Footnotes / references
[3]
Flight Centre store in Christchurch, New Zealand.

FCTG operates under multiple names in Australia, New Zealand, United States, Canada, United Kingdom, South Africa, Hong Kong, India, China, Singapore, United Arab Emirates, and Mexico, and licenses its name in a further 80 countries.[3] In the United States, the company operates under the Liberty Travel and Travel Associates retail brands and GOGO Worldwide Vacations as a wholesale brand. It also operates StudentUniverse, FCM Travel Solutions, Corporate Traveler, ciEvents, Campus Travel and Stage & Screen and Healthwise.

History

The company was co-founded by Graham Turner and Geoff Harris in 1982 and began with a store in Sydney. In 1995, Flight Centre UK and Flight Centre Canada opened.[4]

In December 2015, the company acquired StudentUniverse[5] and a 70% stake in BYOjet.[6] Additionally, in 2016, the company began online travel brand Aunt Betty.[7] Together, BYOJet and Aunt Betty operate as "low cost" Australian online travel agents, providing flights and other services at lower prices than Flight Centre's retail locations.

In New Zealand, Flight Centre operates a number of brands including Cruiseabout, Student Flights, Travel Associates, FCM Travel Solutions, Corporate Traveller, Travel Money NZ, Travel Managers Group and Executive Travel Group.

Flight Centre was severely impacted by the COVID-19 pandemic, which saw a 80% decline in the company's share price (or about 85% from the August 2018 peak),[8] cancellation of a previously announced dividend,[9] and a suspension in trading of shares from 23 March 2020 to 7 April 2020.[10][11] In early 2020, Flight Centre announced that 6,000 staff would be made redundant or placed on unpaid leave globally, due to the effects of international travel restrictions in the pandemic.[12] This included 3,800 staff in Australia. The New Zealand branch of the company made 250 employees redundant and temporarily closed 33 branches, out of a total of 1200 employees and 140 outlets around New Zealand.[13] In June 2020, Flight Centre announced the redundancy of a further 1500 staff.[14] In October 2020, the company announced the closure of a further 91 stores, with several hundred further redundancies.[15]

In response to the pandemic, Flight Centre carried out an emergency rescue equity raising in April 2020 of $700 million at a price of $7.20 per share, or approximately 90% less than its August 2018 peak.[16][17] In June 2020 it sought a further debt facility from the Bank of England under emergency COVID-19 schemes.[18]

Controversy

In 2016, Flight Centre UK was featured on Channel 4's Dispatches in an episode called 'The Truth About Cheap Flights'. Dispatches found alleged examples of undisclosed flight mark-ups, discriminatory pricing against elderly customers, not offering refunds for refundable flights, and seat-blocking.[19] While none of these practises were deemed illegal, Flight Centre received several instances of negative press surrounding the allegations.[20][21] Flight Centre's response was that the programme was 'not a fair reflection of our company culture or customer experience' and highlighted 'isolated behaviour that is against our company policies and ethics', promising to consequently deal with the highlighted issues.[22]

In 2017, Flight Centre was criticised for advertising that it would price match competitors and then insisting on charging a $49 fee when customers attempted to claim a price match.[23]

In 2018, Flight Centre was criticised for price gouging after former staff reported that the company trained employees to deliberately overcharge customers to generate profit for the company.[24][25] It was also reported that the base salary of travel consultants was below minimum wage, and staff relied on generating profit through practices such as these in order to earn commissions.[24] The company was the subject of an investigation by The 7.30 Report.[26] In response to the investigation, more than 200 staff contacted the ABC to report widespread bullying, harassment, drug use and a cult-like atmosphere at Flight Centre.[27]

Also in 2018, Stuff.co.nz published copies of posters in Flight Centre offices which reminded female staff selected for the annual "global" staff party to pack condoms and painkillers.[28]

During the COVID-19 pandemic, Flight Centre was criticised for withholding substantial amounts from refunds to customer when suppliers failed to provide travel services, claiming "cancellation fees". Flight Centre later changed course to avoid court action[29] following warnings from the Australian Competition and Consumer Commission[30] and consumers[31][32] that the practice was illegal. Despite this, customers waited months to receive refunds.[33] The company faced further controversy when it was reported that customers who booked directly, rather than through Flight Centre, received refunds more quickly and without deductions,[34] and that one in three customers still had not received refunds six months later.[35]

In December 2020, Flight Centre faced court for allegedly underpaying staff.[36]

See also

References

  1. "Board Profiles". Flight Centre.
  2. "Couriermail.com.au | Subscribe to The Courier Mail for exclusive stories". www.couriermail.com.au.
  3. "Annual Reports". Flight Centre.
  4. André Sammartino (2007), 'Retail', in Dick, H. & Merrett, D. (eds.), The Internationalisation Strategies of Small-Country Firms: The Australian Experience of Globalisation, Edward Elgar: Cheltenham, UK, pp.175–194.
  5. "StudentUniverse Acquired By Flight Centre Travel Group" (Press release). Business Wire. 21 December 2015.
  6. "Flight Centre buys BYOjet.com". news.com.au. 21 December 2015.
  7. "Flight Centre would like to introduce you to Aunt Betty | SMH". www.smh.com.au. Retrieved 5 August 2019.
  8. "Flight Centre Travel Group Limited Share Price & Information - ASX". ASX. Retrieved 2 May 2020.
  9. "Flight Centre Travel Group Cancels Interim Dividend" (PDF). ASX. Retrieved 2 May 2020.
  10. "Flight Centre Travel Group Limited (ASX: FLT) - Suspension from Official Quotation" (PDF). ASX. Retrieved 2 May 2020.
  11. "Flight Centre Travel Group Limited (ASX: FLT) - Reinstatement to Official Quotation" (PDF). ASX. Retrieved 2 May 2020.
  12. "Flight Centre to stand down thousands of workers due to coronavirus". ABC News. Retrieved 1 May 2020.
  13. "Flight Centre lays off staff as coronavirus bites". Stuff. Retrieved 12 April 2020.
  14. "Flight Centre employees face a further 1,500 redundancies".
  15. "Flight Centre boss axes 91 stores, urges Australia to re-open borders". www.abc.net.au. 1 October 2020.
  16. "Flight Centre kicks off pitch for $500m rescue raising". Australian Financial Review.
  17. "Why Flight Centre needed to raise capital – and fast". Livewire Markets.
  18. "Flight Centre Travel Group to take up additional funding" (PDF). ASX.
  19. "The Truth About Cheap Flights: Channel 4 Dispatches | Channel 4". www.channel4.com. Retrieved 13 May 2020.
  20. Wallop, Harry. "Six travel agent tricks to watch out for when you book". The Telegraph. Retrieved 13 May 2020.
  21. Hope, Hannah (24 April 2016). "Major travel agent Flight Centre accused of cheating customers". mirror. Retrieved 13 May 2020.
  22. "Flight Centre refutes claims by Channel 4's Dispatches". www.travelmole.com. Retrieved 13 May 2020.
  23. "'I was given no choice to opt out'". NewsComAu. 1 August 2017.
  24. "Flight Centre accused of 'ripping off' customers, underpaying staff in 'cult' workplace". www.abc.net.au. 21 August 2018.
  25. "Flight Centre accused of gouging customers". NewsComAu. 22 August 2018.
  26. "Flight centre accused of 'ripping off' customers and underpaying staff". 22 August 2018 via www.abc.net.au.
  27. "Bullying, drug use, harassment allegations flood in from former Flight Centre staff". www.abc.net.au. 22 August 2018.
  28. "Flight Centre's mural for women: Carry condoms and become 'Naughtywise' ambassadors". Stuff. 18 July 2018.
  29. Cartwright, Darren (3 May 2020). "Flight Centre drops cancellation fees". The Standard.
  30. "Flight Centre to refund cancellation fees". ACCC. Retrieved 9 May 2020.
  31. "Flight Centre stops charging cancellation fees for trips affected by coronavirus after pressure from ACCC". ABC News. Retrieved 2 May 2020.
  32. "Flight Centre customers plan legal action". The Sydney Morning Herald. Retrieved 2 May 2020.
  33. "'It can take a wee while': Man waits more than two months for Flight Centre refund". www.abc.net.au. 1 June 2020.
  34. "It's worth booking travel direct: a lesson from the Covid crisis". the Guardian. 15 September 2020.
  35. "Flight Centre warns of more job losses to come". Australian Financial Review. 16 September 2020.
  36. "Flight Centre in court for alleged underpayment of staff through 'dubious' pay system". ABC News. 14 December 2020.
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