Flight Centre eyes ground operations

Flight Centre eyes ground operations
By admin

Flight Centre has flagged its desire to invest in ground operations in key tourist areas while small-scale acquisitions will also be considered in other market sectors.

Managing director Graham Turner revealed during a conference call that it may consider digging into cash reserves to fund expansion.

But he stressed the war chest will largely be preserved to provide a buffer when another financial crisis hits – “as it inevitably will”.

Asked what intentions he had for the cash reserves, Turner said: “We will look at the possibility of small acquisitions in a couple of areas where we might be underdone and strategic purchases, particularly in the corporate area.

“We are interested in perhaps getting into ground operations in areas which we provide a huge amount of business to: Fiji, Bali, Phuket. We could grow into that area.”

None of that would involve vast quantities of cash, he added.

“Do you remember the Global Financial Crisis? We want to make sure we are well prepared for anything like that in the future, which will inevitably happen, even if it might be another 20 years.”

Meanwhile, Turner said domestic capacity increases from Virgin and Qantas will see prices soften, but demand could possibly increase.

“It might not be great for the airlines but it’s generally quite positive for us, domestic tourism and corporate travellers,” he said.

Cheap international airfares are also driving demand, Turner added, with yields still lagging behind pre-GFC levels.

Increased capacity from Chinese carriers was also fuelling competition “and they will get better at it”, he added.

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