FLIGHT Centre shares have jumped more than 8% today after the lifting of a trading suspension and a strong take-up of its institutional capital raising.
The company this morning confirmed it had successfully raised more than $560 million, after receiving strong support from existing shareholders at $7.20 per new share, while a fully underwritten offer to retail customers will open next Wed 15 Apr to raise a further $138 million.
“We are extremely pleased and appreciative of the support we have received from both our existing shareholders and new investors,” said Flight Centre MD Graham Turner.
“The suite of initiatives announced yesterday, including the equity raising, will enable Flight Centre to trade through this period of disruption to the global travel industry, while continuing to deliver exceptional service to our corporate and leisure customers,” he said.
Flight Centre’s reaction to the COVID-19 crisis will see it go from a 944 store footprint across Australia to just 516 by the end of Jul (TD yesterday), while the overseas store network will shrink from 593 down to 222 – a total combined reduction of 800 shops.
Occupancy costs are being slashed by 52% while staff costs are declining by a whopping 69%.
The company will also reduce its $19.4 million monthly sales and marketing spend to just $1.3 million, and eliminate all non-essential capital expenditure.
Despite the crisis, the company said it is still receiving some longer-term leisure bookings, as well as interest in intra-state and intra-region travel and bookings relating to essential services and hotel isolation programs.
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THE implementation of lockdowns between 23 Mar and 06 Apr continued the relentless dive in consumer spending on travel, as confirmed in this week’s exclusive News Corp Australia/Travel Daily index (pictured).
The index, which last week measured -72, has now plummeted further to -89.
“No one in the industry will be surprised by these numbers, which for some key retail sectors represent a drop in consumer spend of over 95% compared to the same week last year,” said News Corp industry Head, Travel, Omri Godjin.
The consolidated data is an aggregation of spend across cruise, air, accommodation, OTAs, touring and travel agencies.
Godjin said the credit card-based data is also available in sub-categories for News Corp clients.
“This is part of work we are doing to assist our clients to better understand the total retail travel market,” he said, with CEOs and CMOs welcome to reach out for more details if required.
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THE Australian Competition and Consumer Commission (ACCC) has successfully pursued a case against basketball promoter TEG Live Pty Limited over “false or misleading claims” about seating for games held in Melbourne.
About 5,000 consumers will receive refunds worth more than $5 million, in relation to 20,000 tickets purchased to watch games featuring the USA men’s national basketball team last Aug.
The games, which saw the US team play Australia’s Boomers in Melbourne on 22 and 24 Aug 2019, and the Canadian national team in Sydney on 26 Aug, were promoted to consumers by TEG Live from Mar 2018.
“TEG Live admits it made false or misleading claims about seating at the games held in Melbourne, and acknowledged the ACCC’s concerns that it may have breached the Australian Consumer Law by misleading consumers about which USA national basketball team players would be playing, or available to play, in the games.
“In our view, TEG Live’s conduct was unacceptable,” said ACCC Chair Rod Sims.
When promoting the games, TEG Live used a picture of a US stadium showing the floor-level seats would be tiered; however at the actual Melbourne games many consumers had obstructed views, Sims said.
Consumers paid a premium for floor-level seats, ranging between $895 and $3,995 for a hospitality package, “and may have done so as a result of misleading seating advertising,” he added.
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A $50 MILLION six-star luxury hotel is being planned at the iconic Barossa Valley winery Seppeltsfield.
The 12-storey development (pictured) features around 70 rooms, including suites and penthouses, with all rooms including a private balcony.
The Oscar Seppeltsfield is also set to include a day spa, infinity pool, a top-level sky bar and a restaurant, with planners aiming for it to become the “Opera House of the Barossa”, and to rival McLaren Vale’s d’Arenberg Cube.
To be developed by Luxury Hotels Australia, a consortium made up of a group of South Australian business leaders, Oscar Seppeltsfield is set to begin construction next year, and open its doors in 2022.
The hotel will be built on land owned by Seppeltsfield Wines and leased to Luxury Hotels Australia for 99 years.
“Oscar will complete the grand vision of our tourism master plan for Seppeltsfield to become the most desirable epicurean destination for tourists worldwide,” said Seppeltsfield Wines Proprietor & Managing Director Warren Randall.
“The hotel will be positioned gently in the middle of the Great Terraced Vineyard, surrounded by century old bush vines, an amazingly tranquil location and a short walking distance to the world-class Seppeltsfield tourism village.”
Randall added he hoped the development would elevate Seppeltsfield from a top-50 winery to a global top-five.
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HURTIGRUTEN Cruises has extended the suspension of its global operations through until 12 May, but CEO Daniel Skjeldam has reminded the industry that “the setback is only temporary”.
All expedition cruises will be suspended until that date, while the company’s Alaska/Canada season will be postponed until Jul due to travel restrictions imposed by Canadian authorities.
Norwegian coastal operations will be suspended until 20 May, but two ships have been deployed in an amended domestic schedule to bring vital supplies to isolated communities.
The cruise line’s flexible rebooking policy is showcased on the cover page of today’s TD.
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MALINDO Air has reappointed CVFR Travel Group’s Airline Rep Services as its General Sales Agent for Australia.
The agreement includes sales coverage, fare and product distribution, marketing and media for the Australian market.
Airline Rep Services is currently Malindo’s GSA for the NZ market, and also previously represented the carrier here (TD 30 Oct 2015).
CVFR Travel Group MD Ram Chhabra said “in these unprecedented and uncertain times, the travel industry is going through its worst ever period.
“However we are truly grateful for this appointment,” he said, noting that Malindo’s Australian footprint has expanded from Perth into Brisbane, Melbourne, Sydney and Adelaide.
The carrier can be contacted on 02 8073 0133, and for GSA sales support via email@example.com.
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ANTHONY Gallagher, the former owner of Vacations & Travel Magazine (TD yesterday), has invested in Vacaay, described as a “travel media multi-function discovery platform”.
Vacaay comprises a website and free smartphone app, promising to send “travel inspiration right to your inbox” with a claimed 100,000 unique monthly visitors.
Gallagher said Vacaay was in a “perfect position to grow as a major player in the new landscape,” with COVID-19 likely to impact traditional consumer travel print media publishers.
He said Vacaay’s initial focus would be to stimulate the domestic drive holiday market “and we are working with local tourism boards for this purpose”.
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TRAVEL agents will be key to recovery after the COVID-19 pandemic, according to Cruise Lines International Association (CLIA) Managing Director Australasia Joel Katz.
Rallying industry supporters to make their presence known, Katz included the wider cruise industry as key to recovery also, as it faced a lack of understanding about its size and economic significance, despite decades of strong growth in Australia.
CLIA has written to travel agent members in Australia seeking their support to inform others of cruising’s significance, and speaking out about how vital it is to our tourism industry and the wider economy – more in tomorrow’s Cruise Weekly.
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THE US Department of Transportation (DoT) has ordered airlines in America to provide cash refunds rather than vouchers to customers with cancelled flights.
“The Department is receiving an increasing number of complaints and inquiries from ticketed passengers, including many with non-refundable tickets, who describe having been denied refunds for flights that were cancelled or significantly delayed,” according to a formal statement from the agency.
However the DoT also said it recognised the major impact that the COVID-19 emergency was having on the aviation industry, and would not pursue further action if carriers immediately updated their policies to promptly advise passengers that they have the option of a refund.
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THE latest GDS filings for Jetstar Airways show the carrier operating just 70 domestic weekly flights in Apr and May 2020 – down 97% from its normal level of 1,959 per week prior to the COVID-19 crisis.
The planned operation shows just one daily flight from Melbourne to each of Adelaide, Hobart and Sydney, as well as daily services from Sydney to Adelaide and Brisbane.
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