Travel bans force Flight Centre to shut another 91 stores

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Flight Centre now has only 332 stores remaining of the 740 it had before COVID-19 struck after announcing the shuttering of another 91 stores:

Flight Centre will shut down another 91 stores across Australia, after widespread travel bans and border closures led to billions of dollars of cancelled bookings.

Hundreds of employees will lose their jobs in these latest store closures.

This was on top of the 4,000 sales and support workers that Flight Centre had already axed in the past six months…

These latest cuts will leave the struggling travel agency with 332 surviving retail outlets.

In a statement, the company said: “About 60 of these shops are likely to remain closed (hibernation) for the next six to 12 months while heavy travel restrictions are in place.”

“These shops are expected to reopen when governments lift these restrictions and as travel reawakens”…

Flight Centre’s chief executive Graham Turner has used the latest cost-cutting measures to argue that Australia’s economic health demands that borders be reopened.

“We have to live with this virus,” he told ABC News Breakfast.

“A vaccine is still some months away — and even if it’s here, the virus will still be around for at least two or three years.

“We need the Australian borders open, we need the New Zealand trans-Tasman [bubble] up and running as soon as possible.”

I agree with Turner that domestic borders should reopen. There are only 403 active COVID-19 cases in Australia, and even in Victoria the case count is low if you exclude aged care where community transmission is unlikely.

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Opening up Australia’s international border outside New Zealand is an entirely different matter, however, and risks importing the virus alongside more hard lockdowns.

Surely the quarantine breaches in Victoria highlights the risk is too great.

About the author
Leith van Onselen is Chief Economist at the MB Fund and MB Super. He is also a co-founder of MacroBusiness. Leith has previously worked at the Australian Treasury, Victorian Treasury and Goldman Sachs.