“Any business leader who steers their company through a COVID-19 world automatically qualifies for their MBA.”

Andrew Stark, MD Flight Centre Travel Group South Africa, explains that there are no textbook scenarios and no theory to help business leaders navigate the COVID-19 landscape – there’s only business know-how, experience and empathy. The rule book is out the window.

Like any other business in the tourism industry, the Flight Centre Travel Group was dealt a heavy blow with the COVID-19 pandemic. In less than two weeks, the company went from a thriving and successful venture to what Stark calls a ‘business in hibernation.’

At the end of February, Flight Centre Travel Group still held a glamourous staff conference at Sun City for its 1200 ‘Flighties’ to celebrate a record-breaking year. That month, the Group also launched its new Travel Expo concept, which - for the first time in history – was organised in-store as well as online.

“We were selling leisure travel, and it felt great. We were winning more corporate business than ever before. We were well on track to make 2020 another record year for sales, prosperity and profits. That was the end of February. Little did we know at that time that just two weeks later, the world would start closing in on us.”

As a global company, the Flight Centre Travel Group realised quite quickly that the impact would be disastrous. We saw airlines starting to be grounded, borders being closed and presidential announcements that would affect our businesses from all corners of the globe. “We had daily MD calls with Flight Centre Travel Group offices from around the world that helped us with global insights of markets that were weeks ahead of us.”

“On 11 March, the World Health Organisation declared COVID-19 a global pandemic. Suddenly, there was panic in the business. And all of Flight Centre’s 1200 employees looked to the leadership for guidance and answers.”

Create open dialogue

Before lockdown was even announced in South Africa, Stark decided to implement an open dialogue within the company.

"I called a senior leadership meeting, which comprised of 60 people on Thursday, 19 March, to discuss what COVID-19 was and how it would impact our industry. I remember putting up two pictures: one of a beautiful New York skyline to represent what the travel industry was at that time; and another of a completely devastated city, to show the aftermath of what COVID-19 would do to our industry. Very early on, we realised the significance and the impact it would have on all industries.”

“I told our company that we would come out of this crisis, but we would come out of it battered and bruised. We needed a unified understanding that the road ahead was going to be treacherous and collectively as leaders, we needed to support each other and the new world that awaited.”

The following week, President Cyril Ramaphosa announced a nationwide lockdown.

Slow down and plan meticulously

Although it might sound counterintuitive, Stark decided to slow down the company decisions dramatically. “We now realised our income streams would dry up, but we had no idea of timelines. I remember discussing one or two months with no income with our CFO. Initially, we thought that this was hugely pessimistic. However, a  week later, we considered three or maybe five months, and soon, we were considering what 12 months or even 24 months without income would look like for us as an outbound travel provider.”

There were two clear themes in Stark’s mind: the company had to diminish costs quickly and had to preserve cash. "Although we had a lot of ideas on how to achieve these objectives, I realised we had to meticulously plan as it would have huge social impacts on hundreds of lives.”

“As a leader, people often ask me what keeps me up at night, and that is simply job security for our people. I’ve always been very proud that FCTG is considered an employer of choice. We've grown, and by growing, we've been able to create hundreds of jobs, careers. We offer great job security to families with numerous dependents. I’m very mindful of what a job means to South Africans as it has a huge social impact on many families.”

Surround yourself with a trustworthy team

Stark formed a leadership team around him that he knew would take the company through the hardest period: then the period of hibernation and then the period of re-growth. “That team of eight experienced people has been instrumental in where we are today. From the beginning: I could give them comfort, speak openly, and trust completely in their decisions .”

We decided to work backwards, and look at what financial runway was needed to survive an extended crisis with no income? “We looked at our 2025 plans which comprised of a Vision to have 60 world-class Flight Centre shops, 200 independent Flight Centre Associates, market-leading corporate travel management brands such as Flight Centre Business Travel, Corporate Traveller and FCM, all supported by trusted e-commerce offering. We decided to fast-forward 2025 to 2020, using the crisis to make difficult decisions now that would right-size our business based on the future consumer's behaviour.

Making tough decisions: the good, the bad and the ugly

"We never sugar-coated the bad news: we were honest and open with all our employees from the beginning. We spoke openly about the fact that COVID would take our business back ten years. The day we had to issue Section 189, I sent a personal video to the company explaining what the process meant. I set up virtual Zoom calls with every single affected employee within the company. Every single member of the executive team, including myself, was present on all consultations. The feedback from employees was that the human element wasn’t lost and the company culture survived.”

Flight Centre made the tough decision to close 41 stores, including the Cruiseabout brand. For the first time in its history, the Group issued a Section 189 to all employees to provide the agility to make the unfortunate changes.

Jenna Law, Head of Risk and Audit for the Flight Centre Travel Group, says the leadership, calm, courage and determination Stark showed during this crisis made her feel confident that Flight Centre would survive the crisis.

Law said in an e-mail to Stark: “You have acted courageously and calmly in the face of this crisis, as well as with speed and determination, making decisions that will impact the future of this company as well as have an impact on so many lives.  You took it all in your stride and showed everyone the true meaning of great leadership.”

“I have seen first-hand how poor leadership and lack of transparency and communication can create fear and uncertainty with employees and have a dire effect on employee morale. So, I am hugely grateful for the constant updates and transparency yourself, and the leadership team have shown our people. I think that is a true sign of respect for your employees.”

“The news is not always great, but people deserve to know the truth, and in turn, you earn their respect for being honest with them. I am proud to work for Flight Centre and humbled to still be a part of this great company. So thank you for everything that you have done so far, I can't even imagine the toll it has taken. And stay strong for the upcoming months, as we see what this new world has to offer.” 

Stay true to your values and company culture

"Issuing Section 189 was the toughest thing I ever had to do as a leader," says Stark. “I’m truly humbled by the way our people have handled and accepted this impossible situation.”

“I’m a strong believer that culture eats strategy for breakfast. That is why we kept an open communication channel at all times, and I believe we were honest and fair in everything we did. There are no winners in this situation only a few lucky survivors.” I kept reminding people that were affected, that this was no fault of their own; it was the effects of COVID19.

Ninety-Eight percent of those affected have already accepted the separation packages. The Group also tried to offer all its affected employees the option to join the Flight Centre Associates brand, which is the independent business model in the Group. Thirty percent of affected employees decided to accept the Flight Centre platform to run their own business; instantaneously creating 171 entrepreneurs for the company’s future growth plans.

Prepare for the future

“Even though there has been a limited return to business travel since June, the entire travel and aviation industry is still in hibernation. We have no idea how many months we'll have to hibernate. While we are preparing for the worst, we are working on innovative ways to remain relevant and stimulate the new world order in travel.”

We are making sure we learn from the COVID crisis, to future proof our business should this somehow engulf global economies again. We’ve become cognisant of how spent-thrift we had become.  A crisis was needed to stop and take stock.

Stark says he is preparing for a travel world over the next two years that will be mainly focussed on local travel for all South Africans. “The impact on travel will last years for South Africa and the world: no country is immune. In first-world countries, the recovery time might be quicker. In South Africa, unfortunately, it will be slower due to disposable income constraints. However, we have a beautiful country to explore that we all can re-ignite by spending our hard-earned rands locally.

The government has locked South Africa down with a clear objective to prepare the health sector. But, we can’t afford to keep the economy locked down forever, as that will mean more people will starve because of the effects of COVID on the economy.

The government has started opening a few sectors of the economy under Level 3. As business leaders, the way we can help prepare South Africa for the future is by getting the economy started sooner rather than later. This year – and even next year – business will not be about profits, it will be about demand. It will be about giving people a purpose and motivation to do more with less. It is crucial to keep people employed, working and thinking. That will be the priority for business leaders in a COVID world.