Helloworld says can survive virus downturn

Travel company Helloworld expects revenues to be just 5 per cent of pre-COVID levels between April andSeptember and is forecasting losses of $1.5 million to $2 million a month until then.

But with $150 million in cash reserves Helloworld says it is positioned to survive the coronavirus crisis without the need for a capital raising. 

The company reducing personnel numbers by 75 per cent at the beginning of April and has stood down over 1,050 personnel around the world but says government stimulus programs have allowed it to re-engage with employees.

It has applied for the JobKeeper allowance for over 1,000 personnel in Australia and has received the Wage Subsidy allowance for 290 workers in New Zealand.

It has also received significant rent reductions from its landlords and is waiting to see whether it can recover any of the $3.7 million in override and marketing income it is owed by Virgin Australia, which has gone into voluntary administration.

Helloworld says it has sufficient liquidity to maintain operations for 12 months or longer and is not planning a capital raising at this point.

The company said it expects to see the re-opening of the domestic travel market by September and of the trans-Tasman markets in October or November.

“Helloworld does not expect mid to long haul international outbound travel in the corporate or leisure markets to resume with any material volume until 2021 and a full return to past levels will be conditional upon a vaccine or cure for COVID-19 having been developed and widely distributed.”

It said its agency networks in Australia and New Zealand are processing tens of thousands of refunds for travel and charging the cancellation fees agreed upon at the time of the original booking.

Some airlines, cruise and tour operators have changed their policies to offer credits rather than cash refunds, which many customers are agreeable to especially if cancellation fees are fully waived, the company said.

It is working with suppliers to obtain cash refunds for customers, seeking them when that was a condition of the original booking.

By 1130 AEST, Helloworld shares were up 5.5 cents or 3.1 per cent to $1.80 each.

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