Flight Centre, one of South Africa’s largest booking companies, says it will close 40% of its network as a result of the impact of Covid-19 coronavirus on its business, and the tourism sector in general.
Established in the country in the mid 90s, Flight Centre said it owns over 235 businesses throughout the country, incorporating both leisure, corporate, wholesale and support.
“Over the past five years we have consistently seen our results increase year on year with a current annual turnover of R5.5 billion in sales and over 1,200 employees,” it said.
In a note to clients, Andrew Stark, managing director, Middle East Africa, Flight Centre Travel Group, said: “It is indisputable that the global spread of Covid-19 has had a significant impact on many industries.
“Few have been as profoundly impacted as the tourism and travel sector, with government travel bans, grounded aircraft and non-essential business lockdowns preventing the free movement of our customers, whether travelling for business or leisure.
“While we deal with these unimaginable circumstances, we – and other businesses – are taking some very difficult decisions.”
Stark said that decisions are geared towards guiding the business through a period of hibernation for the travel industry, “while preserving as many jobs as possible for the long-term and ensuring we are well placed to service your needs when the inevitable recovery begins”.
He said that Flight Centre Travel Group South Africa has, therefore, made the decision to right-size its physical retail footprint to better reflect the current trading climate.
“In the retail sector, we will maintain a network of 60 world-class Flight Centre outlets across the country, remaining the largest travel retailer in South Africa.
“We will grow our independent model known as Flight Centre Associates to 200 Independent Travel Owners and we will continue to grow our online presence and functionality through our well-renowned Flight Centre website, exponentially over the coming years,” he said.
He said that the closure of 40% of its network will also include the specialised Cruiseabout brand in South Africa which will be fully absorbed into the Flight Centre brand.
All Cruiseabout stores customers and bookings will be fully managed and transferred across to a Flight Centre Travel Expert and team.
“Customers can rest assured that their travel arrangements and bookings will be well catered for by the rest of the Flight Centre team nationally. If you are holding a booking or have credit due, you will receive a personal email or SMS with confirmation of this in the coming week,” Stark said.
It is unclear at this stage how many jobs will be impacted by the closures. Stark told BusinessTech that he was unable to disclose any further information until internal processes have been concluded.
Flight Centre Travel Group said its retail stores and campuses will remain closed as South Africa moves from risk level 5 to level 4 on 1 May 2020.