Flight Centre shares have fallen after the travel business reported a $510 million loss as a result of the coronavirus pandemic.
Releasing its 2019/20 financial results on Thursday, Flight Centre managing director Graham Turner said government responses to the COVID-19 pandemic had created the most challenging environment in the company’s almost 40-year history.
“Until the past four or five months, we had not seen – and could not have imagined – a scenario in which virtually all flights and travel plans globally would be effectively be grounded for an extended period,” he said.
The company’s losses were incurred entirely during the March-June period when governments locked down borders to slow COVID-19’s spread, preventing or severely restricting leisure and corporate travel globally.
Prior to these restrictions, Flight Centre achieved a $150 million profit for the eight months to February.
The company reported a total transaction value of $15.3 billion, down 36 per cent for the year, after minimal sales were recorded in March and throughout the final three months of the financial year.
Most of the company’s forward leisure bookings were also cancelled and the transactions reversed.
The travel retailer recorded a statutory $849 million loss before tax, which included $339 million in one-off items.
“Travel is starting to gradually recover in locations like North America, Europe and South Africa, where domestic borders are now open, although we are also seeing heightened restrictions in Australia and New Zealand, after earlier relaxations,” Mr Turner said.
Given the uncertainty surrounding timeframes for the government-imposed travel restrictions to be lifted, the company isn’t in a position at this stage to give market guidance of future earnings.
Flight Centre shares were down 1.3 per cent at $12.45, bucking the trend of a rising share market.