The travel sector is now a wasteland as the COVID-19 virus continues to wreak havoc across here and across the globe.
Travel group, Helloworld announced it will make 275 staff redundant and temporarily stand down 1300 more workers – or 65% of its workforce – for two and half months, as the coronavirus pandemic causes travel to grind to a halt.
All remaining staff will work reduced hours.
Helloworld said the moves were intended to mitigate the impact of the COVID-19 outbreak.
“Current liquidity, existing facilities and cost reduction actions will enable HLO to withstand the significant reduction in trading activity while still preserving the capability to ramp up operations when travel demand rebounds,” it said.
The company said the CEO and Executive Director will, effective immediately, take no salary (previously advised 30% and 25% cut respectively) for the next three and a half months to 30 June 2020;
“Direct Reports to the CEO will have a further 15% reduction for the same period making the total reduction 40%;
“We have or are in the process of renegotiating rents with our major landlords and they have agreed to more favourable terms over the next six to nine months,” the company added.
The shares fell more than 18% to 75 cents.
Meanwhile Flight Centre has cancelled $40.1 million worth of interim dividend payments as the travel agency group grapples to deal with the virtual halt of air travel globally.
The cancellation of the 40 cents a share payout followed the suspension of trading in the company’s shares last week to allow a response to the ravages of the virus to be developed.
The company asked for and was given a week extension on the trading halt until next Monday, March 30.
“Cancelling the dividend was not a decision that was taken lightly, but we felt it was appropriate to preserve cash and protect long-term shareholder value, given the current uncertainty and the unprecedented actions that governments have been forced to adopt to slow the coronavirus’s spread,” the company’s CEO Graham Turner said in Monday’s statement.
“Today, we have requested a short-term suspension of trading in our shares while we finalise our strategies ahead of a more detailed ASX announcement in the near-term and following the further restrictions that were applied over the weekend.
“Please note that these ASX requests relate solely to share trading and have no impact on our leisure and corporate travel operations,” Mr Turner said.
