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Flight Centre forks out $600million in refunds to customers stuck home during the pandemic

Flight Centre has refunded more than $600million to customers who have been forced to cancel holidays as a result of the coronavirus pandemic.

The Queensland-based travel agent has marked 2020 as its most challenging year in history with a full year statutory loss of $849million.

The company was forced to cut 70 per cent of its workforce following the closure of international borders and bans on domestic travel.

Their active workforce dropped from 20,000 to just 6,000 and sales have plunged by 36 per cent this year.

Half of all the company’s global stores have also been closed, the Courier Mail reported.  

The blow comes after Flight Centre recorded a $343.5million profit in 2019, with CEO Graham Turner dubbing the loss as ‘unprecedented’.

‘There’s no comparison, we’ve never posted a loss since 1982,’ he said. 

The company issued $20million in refunds just last week after customers grew frustrated having to wait so long to get their money back.

‘We’re an organisation that’s been built to sell travel, not to process refunds,’ Mr Turner said. 

Mr Turner said there are currently 1,500 people in Australia working to process refunds and while there have been hiccups, the company is getting better at it.

Flight Centre customers are given three options when it comes to their bookings – changing the date, receiving a travel credit or requesting a refund.

However, refunds are subject to the airline or travel supplier’s terms and conditions and most customers will only get refunds from Flight Centre if the supplier has cancelled their service.

Refunds are also given out if the supplier has updated their coronavirus cancellation terms to include the dates of the customer’s departure.

Government restrictions in line with Smartraveller that specify travel bans are in place will also allow customers to receive a refund with no cancellation fee. 

He also believes the business will take back its share of the market when travel becomes a norm again, but it depends on travel restrictions.

While he believes coronavirus could impact the country for years to come, Mr Turner is pushing for things to go back to normal.

‘I share with just about everyone else in business, travel, airports airlines hospitality and tourism – we’ve got to be able to live with this virus,’ he said. 

Mr Turner, executives and the Flight Centre board took a 50 per cent pay cut earlier this year.

They are still pushing the idea of international travel bubbles with nearby countries, claiming airlines and airports will be able to enforce protocols.

In July it was revealed that employees who were stood down could be without work for years.

While some workers will likely return over the next six months, Mr Turner said it would be ‘nowhere near the remaining 14,000’. 

Mr Turner thinks travel will almost be back to normal by the beginning of the 2023 financial year.

He is hopeful Flight Centre will return to 70 per cent of former travel levels in and out of Australia within a couple of years.  

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