In May last year, Qantas said it would drop front-end commissions paid to travel agents on international tickets to 1 per cent from 5 per cent – in line with foreign airlines – with the cut to kick in from July.
Not that Flight Center has not fielded its share of controversy.
In 2018, the travel center group was fined $ 12.5 million for trying to get three international airlines to enter into price-fixing arrangements between 2005 and 2009.
Flight Center also copped flack and eventually backed down over customer refund issues when COVID-19 hit in 2020. The company recently won a houses brought by former staff over claims of underpayment.
London? Just six hours away
Mr Turner made his comments to journalists at Sydney’s Restaurant Hubert on May 10, an event hosted by Flight Center to mark the 40th anniversary. In his presentation by him, he shared predictions and lessons.
His most intriguing prediction was that over the next 40 years, new generation high speed (Mach3) intercontinental aircraft will allow travelers to get from Sydney to a long-haul city like London or New York in less than six hours.
“The planes are powered by liquid hydrogen processed by renewables,” Mr Turner said, adding that airfares might not be pretty given the fuel cost is about “double relative the cost of kerosene in 2022 ″, Turner said.
“Over the past 40 years, Flight Center has survived a lot, including two Gulf wars, September 11, and the 2008 recession, but COVID has been the most traumatic two years we’ve ever had,” he said.
Today, 11,000 of his workforce are back (about 50 per cent of pre-COVID-19 levels), and the company is recruiting at least 1000 workers.
“COVID is a past thing, but it’s still around,” Turner said, adding he hoped Flight Center would finally “make a small profit” for March / April. That will be a welcome change given the company halved its number of stores and staff when the pandemic struck and had lost $ 507 million in 2020 alone.
The pandemic sparked “a great overreaction from governments worldwide,” he said, adding that “China is in for a lot more pain”, referring to President Xi Jinping’s zero-tolerance COVID-19 policy.
The Flight Center story began when Turner went to the UK in 1972 to work as a veterinarian in Yorkshire, and soon began operating regular group trips to Europe for friends and friends of friends in a decommissioned double-decker bus.
Profitable everywhere it operates
“We weren’t interested in business, it was about having a good time and picking up a few girls,” Mr Turner said.
By the time it was operating as a viable business, one of the selling points was that at £ 365 a person for a five-month overland trip from London to Europe, it was cheaper to live “on the deckers” as they were dubbed than to pay rent in the City.
When Turner returned to Australia and kick-started Flight Center, he ended up in Brisbane because the bank would not give him a home loan, meaning he could not afford a house in Sydney. The first Flight Center in Australia was opened by a co-founder, Bill Jamesin Martin Place.
Turner reflected that 2011 was the first year the company became profitable in every country where it operates.
Global managing director Andrew Stark, who has relocated to Brisbane from South Africa, said the main future strategy was “omni-retailing”, bringing together all channels for customers to access the business, including an in-store experience, mobile or desktop, ” over the phone ”and the Flight Center app.
“Via our new omni-retail model, the business will increase its online sales to 40 per cent of total transactional value by 2025,” Stark said.
“Already, 85 per cent of our customers start their journey on a mobile device, so that’s a big growth area.” Over the past few years, the company has seen the volume of business conducted online jump from 5 per cent to 20 per cent.
The company is also looking to push into new geographical markets beyond its traditional heavy weighting towards English-speaking “Anglo” countries.