How Flight Centre Lost AU$849 Million: The Crisis That Brought a Travel Giant to Its Knees

Shivangi

Jun 27, 2026 10:08 PM IST

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Synopsis

Flight centre, Australian travel company, has been helping people around the world to book their holidays and business travel for almost 40 years. Then COVID-19 happened and within weeks what the company built started…

Flight centre, Australian travel company, has been helping people around the world to book their holidays and business travel for almost 40 years. Then COVID-19 happened and within weeks what the company built started to collapse. Borders closed, planes were grounded and the same customer who called to book flights became one who called to cancel. In that fiscal year, Flight Centre posted a net loss of AU$849.1 million, the biggest in its history. In a few months, record profits turned to near collapse for the Australian travel company. 

From a Small Sydney Store Grew to a Worldwide Travel Business

The Flight Centre started small. Established in 1982, it opened its first store in Sydney like just another travel agency trying to enter an already crowded field. The company didn’t simply sell air tickets, it built relationships with customers and provided advice and high-touch personal customer service that would keep bringing people back.

That approach paid off. Initial growth was largely in Australia, before reaching into New Zealand, the UK, Canada, South Africa and the US. Over the years, it also acquired and developed a broad array of other travel brands to appeal to different types of travellers from holidaymakers to corporate clients.

By 2019 the company became a multinational travel network that has positioned itself as one of the largest groups of travel agencies in the world with operations across more than 20 countries through brands including Flight Centre, Corporate Traveller, FCM Travel, StudentUniverse and Travel Associates. It earned more than AU$3 billion in revenue and a profit of AU$264.5 million that year

The Vet Who Built A Travel Empire

This growth had Graham Turner at the helm, co-founding the company with Geoff Harris but then taking over to drive it forward. Turner was a vet, not a businessman, before any of this. But it was a transformational trip he took backpacking through Europe. He came home knowing there had to be a better way after witnessing how difficult life was for young backpackers trying to find cheap, trustworthy help when travelling.

Flight Centre was born out of that idea, back in 1982. Turner was intimately involved in the business as it expanded, opening stores one by one, year after year, eventually turning it into a public company and making himself known as one of Australia’s most well-known businessmen. The little store he founded decades before had, by the time of COVID, become a corporation with thousands of employees across the world.

A business that only worked if people kept travelling

Flight Centre’s whole model depended on one fundamental people booking trips. The company earned a commission or service fee on every aircraft, hotel, cruise or tour booked. The money kept coming as long as people kept travelling.

The firm was not only dependent on holidaymakers. It gradually built a lucrative business as an outsourced travel provider for other corporations too, through brands such as FCM Travel and Corporate Traveller, which emerged as one of its main revenue earners and cemented it amongst the largest travel management companies in the world.

Flight Centre continued to pour money into its stores, despite booking online becoming more prevalent. The management thought that people still wanted a real live travel consultant to discuss going on expenses. That worked well enough when all was normal, but it also meant that the company was shouldering really big expenses via its network of stores, and those costs would soon become a big issue.

Then the World Just Stopped

Early 2020 brought news about a dangerous spreading virus, and suddenly the world completely changed overnight. Borders were closed, airlines stopped, and the governments told people to stay at home. Tourism, almost everywhere, simply stopped.

This was a brutal and immediate hit on Flight Centre. The company existed solely because people travelled and suddenly, nobody was. New bookings nearly vanished overnight. It only got worse as things sped up. While travel had slowed before during prior downturns, it had never halted completely and globally as this one did. Flight Centre had never faced a crisis where all of its customer base suddenly dried up overnight.

When bookings turned into a flood of refunds 

The pandemic had a huge impact on the company which shifted from the sale of holidays to their cancellation. When flights were cancelled and lockdowns spread across the world, hundreds of thousands of customers wanted their cash back. Staff were trying to do it all, and cash flow was impacted massively.

Even during the time where there was no income flowing in, bills kept rolling. The company had to pay for stores and give out salaries. Even the entire travel industry was also suffering delays in processing refunds, because airlines and suppliers were coping with their financial mess. On one side was an angry customer and on the other end were suppliers who were not moving quickly enough, leaving Flight Centre stuck in the middle.

The numbers reveal the true story

The earnings were reported and they showed just how bad it had gotten. For the year to 30 June 2020, statutory loss after tax stood at AU$849.1m, in stark contrast to a profit of AU$264.5m booked last year. And its underlying loss before tax was a whopping AU$510.2 million, which just demonstrates how quickly the business was in tatters.

Revenue collapsed and the management called it the hardest time ever in the history of the company. And for investors, the numbers were stark evidence of how exposed the company had become. This was a worldwide cessation of travel, something that Flight Centre could not possibly influence.

Business Impact	Figure
Statutory loss	AU$849.1 million
Previous year’s profit	AU$264.5 million
Underlying pre-tax loss	AU$510.2 million
Capital raised	~AU$700 million
Jobs cut	6,000+
Countries affected	20+
Store closures	Hundreds
Borders closed	Global

Thousands of jobs lost, stores closed 

The Flight Centre had no option but to go deep after accumulating losses. Worldwide, the company shed more than 6,000 staff, including thousands in Australia, many of whom had focused their careers on working for the business.

Even its network of stores shifted dramatically. Before COVID, Flight Centre had hundreds of stores both in Australia and abroad. Travel bans were still there, with nobody booking trips in any way, many of those stores just didn’t make any money anymore, and the company closed a large number of them for good, putting an end to this historical strategy with presence in high streets or shopping centres.

The fallout extended beyond the Flight Centre itself. Big shopping centre tenants, and landlords were left fighting to fill vacant stores; while many communities lost the local travel agency they’d relied on for several years.

Raising Cash Just to Stay in Business

The job cuts and store closures helped, but on their own, they are not enough. International travel was still effectively suspended and Flight Centre needed cash designed for survival only. Its first step was launching a capital raise of about AU$700 million in June 2020 to provide itself with sufficient financial leeway to weather the crisis.

The firm also arranged additional banking facilities and collaborated with lenders on financial improvement efforts. It was never about expansion or opening new venues. 

And this period saw executives also take pay cuts. Marketing budgets were cut, new investments were put on hold and every expense that was not critically important to the company was scrutinised as it transitioned from a purely growth mindset to survival mode.

Why Travel Covid Hit Harder Than Almost Anyone Else

COVID took a toll on virtually every sector, but travel suffered like few others. Restaurants could pivot to takeaway. Retailers may embrace more online. Think about how many office jobs just worked from home. Those escape routes were not available for Flight Centre, because its entire business relied on one thing that had all but disappeared: People travelling.

It also had higher fixed costs than most. Hundreds of stores, number of office spaces, technology systems and salaries all require funding while the bookings remained at zero. The travel sector was not spared, with more expensive physical assets for Flight Centre to run that didn’t have the same ability to switch off overnight.

Compounding the agony was the unpredictability of it all. There was no indication as to when borders would open or when airlines would return to normal operation. Every few weeks brought new restrictions or extensions, which left the company almost no confidence to plan.

The Worst Moment In Flight Centre’s History

At the end of FY20, Flight Centre was almost unrecognisable from the company it had been just 12 months earlier. It had gone from AU$264.5 million in profits to an AU$849.1 million loss Thousands of staff had already been lost, stores in several countries had closed, and the company had raised hundreds of millions to simply continue operating.

The crisis reshuffled the entire travel ecosystem in terms of investor perception. Companies that were once seen as bulletproof suddenly looked vulnerable with their fate completely dependent on whether more borders stayed open. 

Flight Centre had survived previous downtimes, but nothing was ever going to be like 2020. It remains the largest loss in the company’s history and one of the biggest blows ever to an Australian travel business, losing AU$849.1 million. 

But it also became a successful company after a few business changes combating the losses of COVID-19. To read how it pivoted from the crisis, read here.

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