The Flight Centre story

In 1982, I invested $3,000 to open the first Flight Centre store in Melbourne with my co-founders, Bill James and Graham Turner. 

As we left London in the late 1970s, we observed a new emerging trend in travel; 747 Jumbo Jet Travel was starting to take off globally, and the “bucket shop” was born as Australians looked for cheap flights to go “walkabout”. Our positioning was very different to traditional travel agents. We had airline counter office fitouts offering “Discount International Flights” and no domestic travel; we were essentially a broker booking service for all International airlines.  

Although we had no experience in the retail travel industry, some common sense and solid business practices became the DNA of the startup. Our sales, operations, and staff incentives differed greatly from the existing industry. We were the disrupters in retail travel and became widely disliked within the industry because of our instant sales success (and a 40% compound annual growth in turnover!) 

Flight Centre grew from a startup to a global ASX-listed company, riding the wave of global growth in international travel over four decades. Still, our success was driven by our operational model, structure, teams, and incentives with a totally transparent and open communication system within the company. The entire company was built on teams of 6-7 people, with a team leader and its own P&L paying for support costs and receiving a profit share. We had tribes of up to 25 teams (130-150 people) with their own area leader, name/flag, and support structure. Our entire ethos was egalitarian. Our workforce was highly incentivised with an extremely strong profit share model, and a wonderful reward and recognition system, culminating in an annual global awards celebration for 20% of the highest performers worldwide. At Flight Centre, you really wanted to go to the global awards! 

Flight Centre has survived multiple financial and travel crises, including the 1987 stock market crash, the 1991 recession, the Gulf War, the dot-com crash, the 9/11 terrorist crisis, the SARS epidemic, GFC, and the Covid pandemic. During each crisis, our performance and stock price were negatively impacted, but each time we survived and after weaker competitors fell by the wayside, we came back stronger. How did we do this? I believe our survival and success are built on a great culture within the company, minimal debt, a very strong and stable senior management team, and the ability to make critical changes and pivot quickly when required. 

Flight Centre has a wonderful and deeply engrained profit culture that stands on a foundation of personal responsibility. It permeates throughout the business. Every Team Leader keeps an eagle eye on sales, margins and costs, as they have a profit share for their Area/Business/Support Team. They treat Flight Centre like their own business with a real sense of ownership. 

Flight Centre was listed on the ASX in 1995, and before Covid, it had 22,000 staff, over $20B in turnover, 2900 company owned stores in 14 Countries and a $360M EBIT. We could never have anticipated that the organisations turnover would decrease by more than 90% in less than six weeks! While Flight Centre has been dramatically slimmed down and our shareholding diluted by an emergency capital raising, it not only survived but is now thriving after the world recovers from the pandemic. We remain steadfast in our belief about the qualities of the business that ensured its success in the past and will continue to ensure its success in the future. 

I stepped back from the business in 1998, although I remained on the board until 2008 as a Non-Executive Director. My new mission was youth-based community charities, business startups, and the Hawthorn Football Club.