Flight Centre chief executive Graham Turner has said he believes the industry won’t see a “larger-scale recovery” until the 2023–24 financial year.
Turner said this year will only be one of “gradual recovery” as his business announced a $287.2 million loss for the 12 months to 30 June. Full-year revenue, however, more than doubled to $1 billion.
“While demand remains strong, it is appropriate to put some historical context around the scale of the rebound to date,” wrote Turner. “Travel is at a relatively early stage on the path to recovery.
“Globally, there is considerable pent-up demand for travel that is not yet fully translating to bookings, which means there is also considerable upside potential.
“This pent-up demand is likely to gradually release as the year progresses as travellers readjust to the new normal of the post- COVID-19 world and finalise their plans.
“Our expectations for FY23 are unchanged — we believe this will be a year of gradual recovery for the industry overall, ahead of a larger scale recovery during FY24.
“Inevitably, there has been some turbulence in the months since travel resumed. This turbulence has, in most instances, arisen as a direct result of the industry-wide disruption encountered during the past two years.
“The challenges are well documented and include lack of airline capacity, particularly on international routes, lost luggage, delays in transiting through airports and general staff shortages, which is sometimes leading to flight cancellations.
“Lack of airline capacity is also impacting airfare pricing, particularly in premium cabins.
“We are confident that these teething issues are being addressed and that the pain points that travellers are experiencing right now will be alleviated as the year progresses.”
Turner also said that soaring rate increases and inflation had not noticeably effected demand.
It comes as Qantas recorded an underlying loss before tax of $1.86 billion in its full-year financial results.
Chief executive Alan Joyce said the result takes the before tax impact of COVID-19 on the wider group to $7 billion, which he called “staggering”.
“The past year has been challenging for everyone. We had to ramp down almost all flying once Delta hit and stay that way for several months before ramping back up through multiple Omicron waves as we all learned to live with COVID-19 in the community,” said Joyce.
“We always knew travel demand would recover strongly but the speed and scale of that recovery has been exceptional. Our teams have done an amazing job through the restart and our customers have been extremely patient as the whole industry has dealt with sick leave and labour shortages in the past few months.”