Flight Centre boss warns ‘ridiculous’ Qatar Airways decision will keep fares high

Save articles for later

Add articles to your saved list and come back to them any time.

Flight Centre boss Graham “Skroo” Turner has accused the federal government of deliberately keeping airfares up by rejecting Qatar Airways’s application to double its flights to the country.

Turner, who founded the $4.7 billion travel agency business, said the decision was “ridiculous”, after unveiling a bullish profit upgrade ahead of the group’s full-year results in August.

“The cost of airfares is a huge problem for travellers. I think it’s the most ridiculous decision I’ve ever seen. We have Australian airlines like Qantas, which do not have the capacity for additional services, and yet we’re rejecting Qatar’s extra capacity,” he said.

Flight Centre chief exeuctive Graham “Skroo” Turner has hit out at the government’s decision to reject Qatar Airways’ application for extra flights to Australia. Credit: Dan Peled

Qatar Airways applied to add 21 flights to its services from Doha into Sydney, Melbourne and Brisbane last year. Transport Minister Catherine King confirmed the additional bilateral air rights were not being considered on Monday, as reported by The Australian Financial Review. She did not outline why.

Although supported by most of the tourism and aviation sector, as well as the National and Liberal parties, the application was opposed by Qantas. It was also opposed by five Australian women who were subjected to invasive searches at Hamad International Airport by Qatari federal police ahead of their flight with the airline in 2020.

The women were part of a larger group who were forced to undergo internal examinations after a newborn baby was abandoned in a bin at the airport. The women are now seeking damages from Qatar Airways and the Qatar Civil Aviation Authority – which are both owned by the Qatari government – over the incident.

‘We have Australian airlines like Qantas, which do not have the capacity for additional services, and yet we’re rejecting Qatar’s extra capacity.’

“If the event with the women is the reason the airline has been prevented from additional flights, it is totally illogical,” Turner said. “Qatar as an airline has nothing to do with the behaviour of federal police. If the conduct of a country’s police force is the reason they were rejected we wouldn’t let half the world’s carriers fly to Australia.”

Qatar has a close partnership with Virgin Australia and was one of the few carriers that continued to fly to Australia throughout the COVID-19 pandemic. Qatar also assisted the government’s mission to evacuate Australians during the fall of Kabul in 2021. Sources close to the application process confirmed the carrier expected to be granted the additional flights as a recognition of its goodwill and close trading ties to the country.

Flight Centre upgraded its full-year profit guidance for a second time in just six months on Thursday, after its total transaction value increased by more than 115 per cent on 2022 to $22 billion.

The business now expects its earnings before interest, tax, depreciation and amortisation to be between $295 million and $305 million, a 7 per cent increase on its prior projection at the mid-point.

Turner credited the upgrade to stronger than-anticipated corporate demand, which will eclipse leisure turnover this year, with $11 billion to leisure’s $10 billion now expected. The business’s full-year results will be unveiled on August 30.

    Citi analyst Samuel Seow said the strong corporate performance was an encouraging sign although commented the upgrade lacked detail.

    “Looking forward, we see this as optimistic, as we see a mix as the key driving factor in achieving a 2 per cent profit before tax margin,” Seow said.

    Flight Centre’s share price increased by 4 per cent to $21.65 in mid-morning trade.

    The Business Briefing newsletter delivers major stories, exclusive coverage and expert opinion. Sign up to get it every weekday morning.

      Most Viewed in Business

      From our partners

      Source: Read Full Article