Losing billions didn’t ‘panic’ Flight Centre CEO


Founder Graham Turner dropped out of the rich list for the first time in 20 years, but he insists the travel company is making a comeback.

When Graham Turner first launched Flight Centre in Australia it was actually illegal to sell discounted flights in the country.

But little could he predict that a global pandemic that ground flights and travel to almost a standstill would be the greatest challenge for the 40-year-old company, despite weathering wars and the shock of 9/11.

The 72-year-old, who prefers to go by his nickname, ‘Scroo’, had just returned from London when Australia slammed its international borders shut last March.

He revealed the team had to hibernate costs for the business, bringing them down from $230 million a month to $70 million.

“We were in 23 countries, so it wasn’t just a simple one country thing,” he told The Australian Financial Review’s podcast How I Made It.

“I think having been in business for nearly 50 years and having been through a lot of things I don’t get too stressed.”

Mr Turner, who also launched Top Deck back in the 1970s while working in London as a vet, said he had learned during his time in business “not to panic” as it didn’t change anything.

However, he admits none of his team expected the impact of the pandemic to go on for so long.

“We think it will be three years before we get back to pre Covid levels of business but I think we are all resigned and keen and challenged to see that through and to come back,” he said.

Back in August 2018, Flight Centre was booming with shares at a record high of $61 with Mr Turner’s stake worth about $900 million.

But when Covid hit, shares slumped to under $9 amid an emergency capital raise. Mr Turner was asked if he regretted failing to sell some of his stock at the peak price.

“It’s never a good time, particularly as CEO and as a founder to sell. The main thing is that you have the business at heart and I don’t think its major issue as generally the other founders Bill James and Geoff Harris and I have tended to keep our shaves as we think it’s a good long term investment,” he said.

“And the fact is considering the capitalisation of the company at the moment isn’t too far off $5 billion, which considering we are still losing money is rather extraordinary, but that’s the marketplace at the moment.”

Before the pandemic hit, Flight Centre’s sales were topping $24 billion but dropped to just $4 billion in the last year.

However Mr Turner is confident they are on the comeback trail and has also signalled the company’s famous staff parties will return in July 2022 in Singapore.

“Since 1987 we’ve had the global gathering every year and normally we have three to four thousand people there. They are essentially the leadership group and the top two thousand sales people and its basically a recognition of sales capabilities and its big,” he said.

“Our suppliers contribute a fair bit and we have great artists. I think we had Bill Clinton and Kylie Minogue and those sorts of things last time, so if you into that sort of thing its very exciting.”

He believes the rules around vaccine passports and Covid-19 testing are going to put Flight Centre in big demand in the coming six to 12 months, particularly for business travellers.

“Corporations aren’t going to let people travel without assistance as there are going to be a lot of pitfalls and people are going to get caught either unvaccinated or that sort of problem,” he added.

Mr Turner’s family are actually a team of entrepreneurs. His wife Jude runs Spices Retreats, his daughter Joanna is behind LNDR clothing and his son Matt co-founded 99 bikes, which trades under the name Pedal group.

His son’s business, which Flight Centre owns 47 per cent, the family have a 35 per cent stake in and staff own about 17 per cent, has boomed during the pandemic, Mr Turner said. Turnover was $350 million and it made $50 million in profits.

If he had to share his wisdom, Mr Turner said the biggest thing he has learned during his half a century in business is patience.

“It takes time and you don’t do things overnight. Some tech starts up make it in five years but normally with business you need 10 or 12 or 15 years and up to 20 years to make them successful and you realise you’ve got to be patient and go down some dry gullies … and in the end its about persistence,” he said.

After a “reasonably stressful” year, he has his eyes on his next holiday with his first stop going to be the island of Paros in Greece, which he said has great restaurants and is also good for mountain biking.

Originally published as Flight Centre CEO Graham Turner on how the business weathered Covid-19