The extended furlough scheme “buys businesses breathing space” but will not solve cash flow and debt pressures that still pose a major threat to many travel firms, according to speakers on a Travel Weekly webcast.
Lisa McAuley, managing director of B2B businesses for dnata Travel Europe, welcomed the return and extension of the flexi-furlough scheme, but warned that it shouldn’t be used to “mask more profound problems”.
She said: “It’s almost like re-badging, JSS to furlough, but the furlough gives you greatest savings as a business. So we are using it and the news that it will be extended even further out to March 2021 is even better.
“It’s buying businesses some breathing space. But what I would say is that I genuinely don’t think that furloughs should be used to mask more profound problems that might exist within your business from a cash flow point of view.”
Gary Lewis, chief executive of The Travel Network Group, said: “It’s absolutely welcomed by agents, but obviously, individual members and individual agents have different circumstances, and the extent to which it helps will depend on what they’ve structured and what size and scale and resource they have.
“It also depends on where they are as a director of that business. Are they self-employed? Have they done things with dividends? What have they done historically?”
Lewis also welcomed additional support for the self-employed and flexibility to bring people into the furlough scheme for the first time.
He said: “They’ve allowed people that weren’t on furlough before to now come onto furlough, so that flexibility means that we’ve got people that couldn’t go on to the old furlough scheme, because they hadn’t been on it at a certain point in time.
“We’ve now been able to rest them and bring people who have been on this furlough the whole time, back. So we’ve been able to bring the business together a lot more by merging teams and having people doing 50% of hours because of the flexibility of furlough.”
Lewis added that greater access to grants and the ability to backdate applications could also keep member agencies afloat.
He said: “That will give real cash into their hands. So anything that protects costs and gets some type of cash has got to be welcomed.
“Fingers crossed that will get enough of the resilience through to March, April next year when we hope the testing regimes and the vaccines will have had a huge impact.”