Shares in Flight Centre Travel Group Ltd (ASX: FLT) are worth holding onto, according to the travel company's boss.
Graham 'Skroo' Turner recently told the Australian Financial Review's How I Made It the company would likely take 3 years to get back to pre-pandemic business levels. However, Turner isn't looking to sell any time soon.
As of Friday's close, the Flight Centre share price is trading at $20.47, 0.99% higher than it was at the end of Thursday's session. That brings its gains for the week to 2.45%.
Let's take a closer look at why the company's boss is keeping his stake.
Flight Centre CEO holds shares for growth
Insider ownership is generally a good sign that management has confidence in a business, but Turner is going a step further. He said he was now holding his Flight Centre shares for growth.
According to podcast host Julie-Anne Sprague, in August 2018 when the Flight Centre share price was at a record high, Turner's stake in the company was worth around $900 million.
Then, in 2020, Flight Centre underwent a $700 million capital raise to ward off the effects of the pandemic.
As a result, its outstanding shares nearly doubled. Thus, Turner's stake in the company fell to around 8% right as its share price was tumbling.
When asked if he regretted not selling some of his holdings when the Flight Centre share price hit its pre-pandemic high, Turner stated:
It's never a good time, particularly as CEO and as a founder, to sell. The main thing is that you have the business at heart…
The other founders… and I tended to keep our shares generally because we think it's a good long term investment. The fact is, considering the capitalisation of the company at the moment isn't too far off $5 billion, which considering we're still losing money, is rather extraordinary.
To return the business to its pre-pandemic profit line might take around 3 years, according to Turner. However, when COVID-19 first halted international travel, he hadn't expected it to be that long.
Turner said prior to COVID-19, the biggest negative impact an outside influence had had on the business slowed profits for a just few months:
COVID is nothing like that…when this happened and international travel stopped out of Australia… [we] immediately had to hibernate our costs.
Our costs were around $230 million a month and we had to get that down to about $70 million a month, which is basically what we are now.
