Flight Centre’s COVID-19 response was a flight plan to failure
In the midst of the COVID-19 crisis, Flight Centre flip-flopped on its cancellation fee policy, closed hundreds of stores, and forgot to tell its staff they were out of work. Here, Managing Outcomes’ Tony Jaques explains why the travel agent needed to refer back to the lessons of Crisis Management 101.
The travel industry has been massively hit by the coronavirus pandemic, and it’s an evolving calamity. However, one company seems to have set the bar for how not to respond to a crisis.
When the virus first started to impact his business, Flight Centre CEO Graham Turner announced he would close up to 100 stores – not a surprise given the flood of similar announcements. But it was a surprise to his store staff, who reportedly only heard about it after he told the media. And the statement was strangely equivocal. Turner declared: “It would have happened anyway … the coronavirus just makes it that we’ll shut them a little bit sooner than we would have otherwise.”
Why say that? No expression of regret or empathy. Then he went on to explain: “We’ve got $1.3 billion in cash on our balance sheet, so we’re feeling fairly strong.”
Imagine how motivating that was to his struggling frontline staff having to face the public. In a personal message to customers he wrote: “These employees are people that we do not want to lose. We hope to bring as many of them as possible back on board when conditions improve. They are being stood-down out of necessity, not removed from our business permanently.”
Could Tony please make comment on how the Federal Government could handle their $60 billion error.
But most people will have been refunded by the time they get the Class Action off the ground, so not sure what they are trying to achieve?
Interesting that one of the founders of the Class Action group is an ex Flight Centre employee though, one does have to question motives.
Flight Centre spent a fortune advertising on television, in newspapers, and radio. Only to have all this goodwill and its brand reputation dissolve overnight.
Why? Dumb management. There should be no “in hindsight”, we should have done this or should have done that. Yes, this was an extreme event, but large companies punishing customers in the face of a catastrophe, of any scale is just suicide. This should have been obvious to management.
Flight Centre has grown thick with middle management, no idea Joes, and a nob CEO. Arrogant, dismissive and settled.
Hopefully, this disaster may help the company shed unqualified management and decision-makers. Especially the lower middle-management fat!
Flight Centre’s pencil has been blunt for a long time, time to pull out the sharpener.
Actually, the company’s employees were provided with full details as part of comprehensive internal communications plans that were implemented. We would have been happy to share that information with Tony, had he bothered to ask. .
I hope Issue Outcomes is a bit quicker in responding to their clients needs.
The Flight Centre story is very old.
The rest of us moved on weeks ago.
FCTG has long been an obnoxious, dumpster fire of a business, not to mention they were already overburdened from a retail perspective with 5 or more separate locations in some shopping centres as they worked to consolidate a number of redundant brands (e.g. Escape Travel) that competed with one another. This doesn’t even touch on the absurdity of some of their acquisitions and expansion into markets that they clearly had no idea how to operate in (US & Canada), or divisions that they operated at a break-even that were going to be extremely vulnerable in current market conditions (Travel Money Oz).
COVID is an excuse to finally rationalise FCTG’s store network to one that actually makes sense in a world where travel agents are becoming less and less relevant. Although with such negative PR, one wonders how well they’ll perform once the impact to the industry post COVID blows over.
It’s not the Gov’ts error it was a Treasury error and it’s a favourable one, so i’m not sure what the problem is? if they underestimated by $60 billion there’d be cause to complain about the quality of our bloated public service, but they overshot. It’s a windfall and voters should be ecstatic
It is not the critic who counts; not the man who points out how the strong man stumbles, or where the doer of deeds could have done them better. The credit belongs to the man who is actually in the arena, whose face is marred by dust and sweat and blood; who strives valiantly; who errs, who comes short again and again, because there is no effort without error and shortcoming; but who does actually strive to do the deeds; who knows great enthusiasms, the great devotions; who spends himself in a worthy cause; who at the best knows in the end the triumph of high achievement, and who at the worst, if he fails, at least fails while daring greatly, so that his place shall never be with those cold and timid souls who neither know victory nor defeat.
Theodore Roosevelt
I can’t believe Mumbrella has run such a rubbish story. They obviously didn’t reach out to Flight Centre for comment nor did Tony Jacques, whose motivation is to obviously try and drum up corporate consulting work – shame he’s done so in such a poorly thought out way. If the story wasn’t so biased, it might have been a worthwhile read.
Also, it would be nice if a journalist actually fact-checked this (for once) rather than referencing other misleading tabloid stories.
-The ACCC didn’t threaten legal action, in fact, they said Flight Centre was within their rights to charge those fees but that they didn’t think they should.
-Regarding the comment, “forgot to tell its staff they were out of work,”. A publicly listed company is legally obliged to make these sorts of announcements to the market first and foremost, yes, even before their staff. Do you honestly believe they just ‘forgot’.