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Flight Centre says life is better without SQ
SYDNEY – Flight Centre managing director Graham Turner has been telling Business Spectator’s Robert Gottliebsen and Stephen Bartholomeusz about the outlook for the travel retailer in the wake of its 70 percent fall in profits.
Turner also spoke about the fall-out with Singapore Airlines which has seen Flight Centre steer customers away from SQ in retaliation for the airline’s decision to limit commission payments to Flight Centre.
Turner told Business Spectator that Flight Centre was not suffering as a result of its decision to switch customers to other airlines. Quite the contrary.
“The reality of that situation was that I think Singapore had some sort of a view that their customers were owned by them and that whether we supported them or not, they would still want to fly with Singapore and we have shown that’s clearly wrong,” Turner said.
“Their market share’s gone down considerably. We’re 70 per cent down on them, but we switched our business over to other carriers and the reality is that these days, whether you’re Qantas, Etihad or Emirates or Singapore, there are very good alternative products.
“Most customers, particularly our leisure customer base, just want the best arrangements and that’s why they use a travel agent to get advice on what’s a good value proposition for them
“Since we took that action against Singapore by not signing a preferred arrangement with them, it’s made it a lot easier to conclude our arrangements with other carriers and this is a volatile market.
“So our main point with Singapore and others is that we wanted fixed margins, not margins that were incentivised on volume in a market where fare yields and the like were very volatile.
“It was very hard to know whether they’d continue to decrease, so we just didn’t want that level of volatility in our earnings for this year.â€
Read the full interview with Graham Turner at www.businessspectator.com.au
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