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Flight Centre CEO says airlines will try to recoup COVID losses

written by Hannah Dowling | January 10, 2022

Qantas and Jetstar aircraft lined up together at Sydney Airport. (Seth Jaworski)

Flight Centre CEO Graham ‘Skroo’ Turner has said that airlines “will certainly try” to recoup the massive losses seen throughout the pandemic in their airfares, however, Australia’s competitive market should ultimately see airfares remain fair on busy routes.

“If you look at the way airline fares had been over the last 50 years, it’s generally been very competitive … so I don’t think they’ll have much choice. On competitive routes, they will have to be competitive,” the Flight Centre boss told Sky News Australia.

Domestically, Turner said that competitive airfares will remain low for the medium-term, with the results of this already being seen.

“We’ve spoken to quite a few of the airlines, and they think that … it’ll become quite competitive quite quickly,” he said.

Skroo added that Qantas’ monopoly of the domestic market could see an impact on prices, particularly if the airline does attempt to raise fares.

“I think you’ll see plenty of good fares with Virgin and Jetstar in particular. I think Qantas will be looking for a bit of a windfall domestically, but I don’t think the fares will be that expensive.

“There’ll be plenty of off-peak fares and that they come back with a really good value.”

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Australian airlines now continue to beef up their flight schedules and capacity and are even preparing to add new aircraft to their fleet to account for an increase in demand for air travel post-pandemic.

With this in mind, Skroo said that capacity should continue to strengthen, with a meaningful recovery to be seen “probably in February or March”.

“So then, the fares will be pretty good,” he said.

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However, for international routes, passengers could expect to see a “pandemic tax” on airfares and pay a higher rate than before the pandemic for now.

Turner said that “premium airfares might hold up fairly high” for international travel, as airlines seek to recoup losses, however like domestic travel, he added that economy fares will likely come back to pre-pandemic levels on more competitive routes.

International airfares may also be impacted, should foreign airlines delay their return to the Australian market after nearly two years.

It follows numerous warnings that foreign airlines may opt not to return to Australia in the short-to-medium term, given the uncertainty posed by the confusing and ever-changing nature of travel restrictions.

In September, the Australian Airports Association (AAA) flagged serious concerns over the industry’s inability to adequately prepare for the restart of international flights, given that airlines need to prepare schedules well in advance.

“Some international carriers are either already drawing down capacity or preparing to withdraw from Australian ports altogether,” the association said, noting this could have a “significant” impact on Australia’s reopening plans.

“Given the aviation industry has long [six to 12 months] lead times for carriers and airports to re-establish international routes, significant planning will need to occur now to ensure airports and airlines are ready.”

AAA chief executive James Goodwin said, “If [airlines] don’t know what the rules or protocols will be for Australia eight or nine months from now, we could lose them for 2022. Then we’re looking at 2023.”

“The reality is, when we are ready to open up, we may not have as many airlines as we were used to. We may find airfares will be more expensive and we may find we have difficulty getting tourists into Australia.”

Comments (8)

  • Terrence

    says:

    This bloke should mind his own business…literally.
    A few months’ ago, when Flight Centre did a deal with Rex, the share price of Flight Centre dropped substantially.

    He’s not the CEO of an airline, so how would he know what an airline’s going to do?

    He & Branson are cut from the same cloth.

  • AgentGerko

    says:

    Graeme Turner should also have mentioned how the airlines, or Qantas and Emirates so far, are planning on recouping some of their losses by screwing travel agents. We are the people who have stayed open despite no income over two years in order to process their changes, cancellations and refund. This has allowed the airlines to lay off staff, saving them millions of dollars. And how do they thank us? Mr Joyce announced last year that from 1st July this year he will reduce agent commission by 80%, down from 5% to a miserable 1%. Gee thanks.

    • Warwick

      says:

      Why do travel agents’ get ‘commission’ from an airline?
      Incentive to book that particular airline.

      They shouldn’t get any commission, so what CEO Mr Alan Joyce has done is correct.
      His decision would be based on the amount of sales travel agents’ have achieved for his airline.
      Obviously, it didn’t amount to much, so commission has been cut, again.

      Over many decades’, these travel agents’ have preferred to sell any other carrier in, & ex Australia, rather than QANTAS.

      You reap what you sow, & they’ve only got themselves to blame for the commission reduction.

    • Lindsay

      says:

      Bet you charge clients’ a ‘service fee’ to action ‘changes, cancellations, & refunds’.

      You wouldn’t do those time consuming parts of business for nothing, that would be very foolish.

      So stop with the ‘soap box’ rhetoric against QANTAS, & its’ decision.

  • Marum

    says:

    Who needs the “Ticket Clippers” (middle men). I have never booked aa flight through a Travel Agent in my life. I also have no intention of ever doing so.
    Regards….Marum.

    • Ashley

      says:

      Couldn’t agree more, Marum.

      Many of them are ‘dodgy’, inefficient, & lack knowledge of their supposed business.
      A ‘good’ travel agent seems to be few & far between.

      Could never understand why people, if they only wanted to book a flight, would go to a travel agent, & not directly to the airline with whom they wanted to fly. It made no sense.

      Like you, I’ve ALWAYS booked through the airline, & in this age of online bookings, it’s so easy dealing with the airline directly.

  • Clipped Wing

    says:

    Good old Skroo trying to throw barbs in an attempt to get free marketing…

    My only experience with Flight Centre as a customer was looking to book my honeymoon. I was given a bunch of inflated prices for a number of airlines, although there was one that clearly stood out from a price perspective. The standout was the flights being heavily pushed by the agent, however there was a problem in getting my wife and I a seat together on the flights we wanted. The agent first asked if it was important to sit together (being our honeymoon I said it kind of was). The agent’s option – book another four nights accommodation and then the flight will open up so we can sit together. This also meant that we would have to stay in the terminal in the middle of the night for six hours before our connecting flight. We were then advised to book there and then, otherwise she could not guarantee the pricing wouldn’t change.

    I politely declined, and did some further research online and found capacity on the flights we originally wanted (with no long layovers prior to connecting flights) at less than half the price that we were quoted.

    Maybe Skroo should look at his own business model before he begins to criticize others?

  • Peter

    says:

    Yes, Clipped Wing, your experience with Flight Centre is just the tip of the iceberg in relation to how travel agents’ conduct their ‘business’

    What Warwick has said in above comment is 100% correct.

    No wonder folk have deserted using a t/a in droves, to book online, dealing with an airline directly.

    Pleased for you, & your wife, that all worked out well.

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